Insurance Coverage For Accidental Death - Proximate Cause Necessary; Supreme Court Denies Claim For Sun Stroke Death During Election Duty

The Supreme Court has held that the death occurring due to sun-stroke during election duty will not come within the scope of the clause "death only resulting solely and directly from accident caused by external violent and any other visible means" in the insurance policy.

In the year 2000, the National Insurance Company had entered into an MoU with the Chief Electoral Officer of Bihar to provide insurance cover to persons deployed for election work in the 2000 assembly elections. One officer who was deployed for election duty died due to sun stroke while performing his duties.

The issue before the Supreme Court was whether the wife of the deceased was entitled to claim insurance coverage under the MoU by relying on the above-quoted clause. The insurance company came in appeal before the Supreme Court after the Patna High Court granted relief to the widow.

Allowing the insurer's appeal, a bench comprising Justices SK Kaul and AS Oka held that death due to sun-stroke did not fall within the scope of the policy agreement.

Plain and strict reading of insurance policy is the guiding principle

The Court held that a plain and strict reading of an insurance policy is the guiding principle to interpret an insurance policy. Reliance was placed on the 2019 precedent Alka Shukla vs Life Insurance Corporation Ltd, which explained what will be an "accidental death" in the context of an insurance policy.

Referring to the precedent, the Court observed that a "proximate causal relationship between the accident and the body injury is a necessity". Also, the importance of plain reading of the insurance policy was highlighted as a guiding principle.

"On a plain reading itself, leave aside the question of strict interpretation of the clauses, it is quite apparent that the admissibility of the claim is in the event of death. The second part of the same sentence begins with “only”. Thus, even in the event of a death, it is only in the scenario where the consequent situation arises, i.e., it has to be solely and directly from an accident caused by external violence. Here the death is by sun stroke. There was no semblance of any violence being the cause of death. The last aspect which reads as “any other visible means” would be an expression to be read in the context of ejusdem generis with the external violent death and cannot be read in isolation itself.”

'Claim way beyond any responsible time period'

Noting the admitted position that the wife of the deceased never made an application for claim on Chief Electoral Officer even after seven and a half years of the death of the deceased, the court said, “Thus, by any standards this claim was beyond any reasonable time period.”

The court further held, “It was the responsibility of the Respondent No. 1 to file the claim within the time period.”

Law on Interpretation of Clauses in Insurance Policies 

Reiterating the law on interpretation of clauses in insurance policies, the court held the following:

a. It is trite to say that the terms of the insurance policy are to be strictly construed.

b. The insurance contracts are in the nature of special class of contracts having distinctive features such as utmost good faith, insurable interest, indemnity subrogation, contribution and proximate cause which are common to all types of insurances. Each class of insurance also has individual features of its own.

c. Words used in a contract of insurance must be given paramount importance and it is not open for the Court to add, delete or substitute any words

d. Insurance contracts are in the nature where exceptions cannot be made on ground of equity and the Courts ought not to interfere with the terms of an insurance agreement

e. Insured cannot claim anything more than what is covered by the insurance policy. The terms of the contract have to be construed strictly, without altering the nature of the contract as the same may affect the interests of the parties adversely.

f. The clauses of an insurance policy have to be read as they are.

g. Insurance contract must be read as a whole and every attempt should be made to harmonise the terms thereof

h. plain reading of the policy should be the guiding principle.

i. A proximate causal relationship between the accident and the body injury is a necessity.

Case Title: NATIONAL INSURANCE COMPANY LTD. Versus THE CHIEF ELECTORAL OFFICER & ORS CIVIL APPEAL No.4769 OF 2022

Citation : 2023 LiveLaw (SC) 90

For Appellant(s) Mr. Garvesh Kabra, AOR

For Respondent(s) Mr. Amit Sharma, AOR Mr. Dipesh Sinha, AOR Ms. Aparna Singh, Adv. Ms. Sakshi Upadhyay, Adv

Insurance Law - Accidental death- Death due to sun stroke during election duty will not come under the scope of the clause "death only resulting solely and directly from accident caused by external violent and any other visible means"- proximate causal relationship between the accident and the body injury is a necessity- plain reading of the clauses is the guiding principle to interpret insurance contracts- Followed Alka Shukla vs LIC ((2019) 6 SCC 64

Insurance Law - Court elucidates the principles of interpretation - Paras 26, 27

Read the Judgment Here