Death benefits denied due to substance abuse.

On April 26, 2012, the New Brunswick Court of Queen’s Bench dismissed an application by a widow for an order that a group creditor insurer pay her pursuant to a policy of insurance following her husband’s death.

In Laird v. First Canadian Insurance Corp., the applicant, Mrs. Laird, and her husband, Mr. Laird, purchased group credit insurance when they purchased a new vehicle. On the application for insurance Mr. Laird answered “yes” to a question about whether he suffered from “any illness/disorder of the heart, brain, lungs, kidney, liver, or pancreas (diabetes).” No follow-up medical questions or inquiries were made by the insurer, First Canadian. The back of the application stated you “are enrolled in the Policy of Group Creditor Insurance and this certificate is evidence of that insurance. Your insurance will be provided by [First Canadian] under this policy.”

Mr. Laird subsequently died. No autopsy was performed, but the attending physician’s statement listed the “immediate cause of death” as a myocardial infarction (heart attack), the “antecedent causes” as acute renal failure, and noted Mr. Laird’s “other significant conditions” to include liver cirrhosis, diabetes, and dyslipidemia. It was also stated that drugs and alcohol were a factor in Mr. Laird’s death due to his liver disease/cirrhosis.

First Canadian denied Mrs. Laird’s claim for payment on an exclusion set out in the policy which stated that First Canadian will have no liability, except to refund unearned premiums, “where the death of an insured results from or is caused or contributed to directly or indirectly by…illness, disease, or death resulting from Alcohol or Drug Use/Abuse…”

The Court dismissed Ms. Laird’s application for payment and held that First Canadian was justified in denying payment and in concluding that Mr. Laird’s death was caused or contributed to directly or indirectly by alcohol abuse/use. The language used in the exclusions and limitations was not ambiguous therefore the principle of contra proferentem did not apply.