Meaning of the word “Accident” under insurance

Dear Friends, you all know that our world is full of uncertainties and risks. Some of these are man made and some made by All Mighty. In the meantime, whole world is facing an unprecedented risk of life due to man-made COVID-19 pandemic. This virus has changed our lives and forced us to stay in our homes. This a product of greed and inhuman activities by the Chinese Government. We have lost more than 5.00 Lakhs people in whole world and still counting.

To mitigate and reduce impact of these uncertainties, we have various insurance products by insurance companies. These insurance products help us financially and mitigate our risk on happening an event insured. Thus, insurance is important for every person now days. We should protect ourselves with adequate insurance cover, which covers our health and life.

We can define insurance is a practice or arrangement by which a company or government agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium or we can say that insurance a thing providing protection against a possible eventuality.

Investopedia: defines an Insurance is a contract, represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses from an insurance company.

We can also say that insurance refers to a contractual arrangement in which one party, i.e. insurance company or the insurer, agrees to compensate the loss or damage sustained to another party, i.e. the insured, by paying a definite amount, in exchange for an adequate consideration called as premium [Business Jargon].

Insurance has the twin objects of providing short term or long-term relief to the insured. The short term ensure protection of insured from loss of property and life. The long term protects industrial growth of the country etc.

When we purchase an insurance policy, we enter into a "Contract of Insurance" with the insurer or insurance company.

"A Contract of Insurance", is a contract by which one party (i.e. insurer or insurance company) in consideration of price paid ( i.e. premium) to him adequate to risk , becomes security to the other (i.e. insured or prospect) , that he shall not suffer loss, damage ,or prejudice by happening of perils specified to the certain things which may be exposed to them."

Insurance is a covenant of good faith, where both parties are covenanted to abide by the terms and conditions of the policy.

An insurance policy contains all terms and conditions agreed between insured and insurer or insurance company. It contains various definition of risks, events, inclusions or exclusions and procedures to be complied by an insured. The insured have to declare truly all details required by insurance company. It is a contract of good faith on both ends.

LET'S CONSIDER WHAT IS ACCIDENT

Dictionary meaning: an unfortunate incident that happens unexpectedly and unintentionally, typically resulting in damage or injury or an event that happens by chance or that is without apparent or deliberate cause.

Marrian-Webester defines: an unexpected usually sudden event that occurs without intent or volition although sometimes through carelessness, unawareness, ignorance, or a combination of causes and that produces an unfortunate result (as an injury) for which the affected party may be entitled to relief under the law or to compensation under an insurance policy

Dictionary.com defines: an undesirable or unfortunate happening that occurs unintentionally and usually results in harm, injury, damage, or loss; casualty; mishap: automobile accidents.

Safeopedia: An accident is an unplanned, unforeseen, and unexpected event that has a negative effect on all activities of the individual who is involved in the accident. An accident can result in death, injury, disease or infection, loss of property, damage to environment, or a combination thereof.

But is difficult to define term "accident" as used in insurance policies. There is a difference in term "accident" and "injury". In an "accident" some violence, casualty or vis major is necessarily involved. The accident involves the idea of something unexpected as opposed to something proceeding from natural causes.

Note: a disease produced by action of some known cause cannot be considered as an accident. 

Thus, disease or death engendered by exposure to heat, cold damp, the viscitudes of climate or atmospheric influence cannot properly be said to be accidental at all events, unless exposure is itself brought about the circumstances which may give it the character of accident.

LETS' CONSIDER

EXAMPLE 1:  Suppose Mr. X is a mariner and due to effects of ordinary exposure to the elements such as common in the course of navigation, he caught by cold or die, such death of Mr. X would not be an accidental death.

But if there was a shipwreck or other disaster as define in the insurance policy, Mr. X quits ship and take sea in open boat, he remained exposed to wet and cold for some time and died due to that. His death might be considered due to an accident.

We also define an accident as "an unlocked for mishap or an untoward event which is not expected or designed."

Any injury is said to be accidental where it is a natural consequence of an unexpected cause, or the unexpected consequences of a natural cause.

EXAMPLE 2: Suppose a train run over Mr. X then it is an accidental event. In other scenarios suppose he is lifting a heavy weight and his spine injured, then this is not called an accidental injury.

EXAMPLE 3: If Mr. Y is running to catch a train and he injures himself in this case also, it is not an accidental injury.

Suppose if same Mr. Y stumbles and sprains his ankle, he meets with an accident because he did not intend to stumble.

Some Important Points:

1. shock due to fright may constitute an accident;
2. if the cause and death result are both natural, injury cannot be called accident;
3. Death by drowning is death by accident within the meaning of a Policy of Accident Insurance;
4. If at the time of the accident , the assured is occupied or engaged in any occupation, trade or business, involving more danger to his safety or life, the company would not liable;
5. If at the time of accident any assured is under influence of liqueur so much as to upset the normal working of his intellectual faculties, the insurer will  not be liable;
6. The insurers are only liable for the death or disablement,caused by accidents and not by disease, or physical disablement.

"Gujarat High Court once held that sine the death was caused by a dog bite which resulted in rabies as has been amply establishing before the trial court which fact is not disputed before this court by the LIC , it was considered a death resulting from an accident and since it was within the stipulated period, the assured was entitled to an additional sum equal to the sum assured under the policy as per accident benefit clause."   

EXAMPLE 4:  The insured, while at a railway station, was seized with a fit and fell forward off the platform across the railway, when an engine ran over his body and killed him. It was held that the death of the assured was caused due to accident.

Accident due to negligence of third person: accidents may also happen by acts of third persons. It is immaterial whether the acts of third person are negligent or even criminal, even if the act is intentional and the third person may except or intend to cause injury to the assured, the injury, so far as the assured is concerned is accidental.  

In case of Surgical Operations:  Policies of accident insurance usually contain express condition as to surgical operations. In this case circumstances that render the operation should be considered. The immediate cause of death may be operation, but the real and efficient cause is to be determined by reference to the circumstances which lead to operation. If, however, the operation is performed with a view to cure a disease, death by such operation in not death by an accident. But if on negligence of the surgeon intervenes and death is attributable to such negligence, death may be said to have been caused by accident. But, on the other hand, if operation is rendered necessary by the consequences of the accident itself, death by such operation would be death aby accident.

An accident policy expected liability in the case of death, or disablement by accident, caused inter alia by medical or surgical treatment or fighting , ballooning or racing, self-injury,sucide or anything swallowed or administered or inhaled.

There are various court decisions in which accident has been defined and the IRDAI has also promulgated strict regulations to protect interest of policyholders.

Conclusion:

While taking any insurance policy, it is suggested that every person should reveals true information and read the policy documents. It is better to take advise of an insurance advisor or investment advisor. You can get more details on some insurance sites and compare products of various companies suitable for you.

Disclaimer:  The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness, and reliability of the information provided, the author assumes no responsibility, therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws and take appropriate advice of consultants. The user of the information agrees that the information is not professional advice and is subject to change without notice. Author assume no responsibility for the consequences of the use of such information.