CR322 Exclusion clause – inserted in definition of an “accident” only


Exclusion clause – inserted in definition of an “accident” only – could it be interpreted to apply as a general exclusion as well?


Ms F held policies that provided her with cover for hospitalization resulting from illness or accident. An accident was defined in the policy, the relevant portion stipulating that –

“Accident means a sudden, uncertain and unexpected event …, and excludes the following:
• …
• …
• hospitalisation for treatment or control of chronic or acute pain (resulting from an illness or injury) will be limited to a maximum of 3 (three) days per event …”

An “illness” was also defined, but neither therein nor in the policy’s general exclusion clause, which listed a number of other exclusions, was any similar exclusion clause contained.

In March 2011 Ms F was hospitalised for 10 days due to gastritis, bronchitis and costochondritis, and submitted a claim to the insurer. The insurer denied liability for more than 3 days’ cover, in doing so relying on the exclusion clause referred to in the definition of “accident” above.

We pointed out to the insurer that the exclusion clause appeared to be only applicable to hospitalisation as a result of an accident, because if it was applicable to all hospitalisation it would presumably have been placed in the section of the policy that listed the general exclusions.

The insurer’s contention in response was that, because the exclusion clause in the definition of “accident” also made reference to illness, it was clear enough that it applied to hospitalization due to both illness and an accident.


At an adjudicators’ meeting the unanimous view was that, because of the location of the exclusion clause in the contract, the ordinary reader would understand that it only had application to hospitalisation as a result of an accident. While the exclusion also embraced an “illness”, an illness, such as for example a serious infection, could result from an accident. On this basis the meeting concluded that the claim should be reassessed and payment for the additional days spent in hospital should be considered.


The insurer accepted the office’s view and the claim for the entire period of hospitalization was settled by the insurer.

January 2012