CR80

Exclusion clause – is it applicable where circumstances surrounding cause of death unclear – onus on the insurer to prove

Background

A number of credit assurance risks were effected in the years 2001, 2002 and 2003 and all were in force at the time of the life assured’s death in 2003.

The life assured’s death was attributed to the ingestion of battery acid. According to evidence adduced the life assured had attended a party where he was drinking beer. At some stage he consumed battery acid and although the circumstances of the ingestion of battery acid are unclear it seems probable that he was given the acid to drink by someone at the party. The post mortem evidence was inconclusive but since there was no external acid burns on the insured’s lips or face but only to his internal digestive system i.e. his pharynx, oesophagus, stomach and intestines, it was suggested that the ingestion of the battery acid was self administered. The result of the inquest proceedings simply recorded that the likely cause of death was acid ingestion and in regard to whether the death was brought about by any act or omission involving or amounting to an offence on the part of any other person the presiding magistrate was unable to make a finding.

The complainant, in his capacity as executor of the estate of the life assured, claimed payment from the insurer, which claim was declined. The insurer relied on the exclusion provision of the policy contract which excluded cover for any claim that has resulted from any self-inflicted injury, self-inflicted illness or exposure to danger, or obvious risk of injury. The insurer alleged that since the claimant had been unable to prove to the insurer whether the life assured had consumed the battery acid of his own accord or whether it had been forcibly poured down his throat, the insurer was unable to effect any payments. The complainant then referred the matter to our office.

Assessment

The credit assurer’s contracts excluded both suicide and self-inflicted injury. The policy wording read as follows:

“No amount shall be payable if in the opinion of the Assurer the claim is in any way due or traceable to, or arises directly or indirectly, entirely or partially from… suicide, self-inflicted injury or illness whether intended or not…”

The policy further stated that:

“No claim shall be considered under this policy if you are not able to furnish documentation acceptable to (the Assurer) that there is positive verification of the claim and the facts giving rise to it.”

We took the view that the onus to prove the exclusion rests with the insurer. That onus was not overtaken or displaced by the contractual provision requiring the complainant “to furnish documentation acceptable to the insurer that is positive verification of the claim and the facts giving rise to it”. The “claim and the facts giving rise to it” is the fact of death. This questionable clause relates not to the recognition but to the substantiation of the claim. We furthermore considered it most unlikely that anyone would drink battery acid in order to commit suicide although it seems almost certain that the deceased drank battery acid of his own free will. We concluded that the act of drinking the battery acid which resulted in his death was in all probability partly caused by his own actions but were in conjunction with the actions of some unknown other party. We therefore ruled provisionally that since the onus relating to the exception rested on the insurer, that the insurer was not in a position to withhold payment of the claim any longer.

In making this provisional ruling we were influenced and guided by the judgment of van Heerden BJ in the Supreme Court of Appeal judgment in Hollard Life Assurance Company Ltd and GJ van der Merwe (unreported case number 569/03). The Court confirmed that the onus is on the insurer to prove the application of an exception and that words “self-inflicted injury or self-inflicted disease” are to be interpreted restrictively which results in only injuries or diseases which are entirely self-inflicted being covered. The court ruled that an injury or disease which is caused partly by the actions or omissions of the insured but in conjunction with the action or omission of some other party or some other contributing factor will fall outside the ambit of the exclusion clause.

Result

The insurer accepted our provisional ruling and made payment of the claim.

DM
October 2005