When is an accident not an accident? In the employee benefits world, what constitutes an accident is defined by the terms of the plan. Last month, the 4th Circuit Court of Appeals drove this home very clearly in a case called Johnson v. Am. United Life Inc. Co., where the Court found that a death from driving while intoxicated was in fact an "accident" under the terms of the plan.
The plan at issue was in insured AD&D plan that originally denied coverage for the driver’s death because he had a BAC of .289 at the time of the accident. The District Court ruled that someone who intentionally drives while intoxicated cannot say they had an accident. The Fourth Circuit disagreed and reversed, saying that the plan terms were what defined an "accident." The key for the Court was that the plan did not define "accident" in the policy, nor did it exclude from coverage events where it was reasonably foreseeable that injury would occur. Arguably driving while intoxicated makes injury more foreseeable than driving sober, but it cannot be said that injury is "substantially certain" to occur. Also, because the policy did not provide the carrier with discretionary authority to interpret plan terms, it left the court open to apply a de novo review of the determination.
Some AD&D policies exclude from coverage incidents that are "reasonably foreseeable." Then they define what that means. Others specifically define what is an accident, and still others exclude accidents that occur from voluntary intoxication. But the point is not about what is a good thing to have in AD&D policies. The point is that, absent specific definitions of terms used in the plan, and absent a provision providing the plan administrator with discretionary authority to interpret provisions, you get results like this. When drafting plan language, be very specific. Make sure you define things properly (and completely) and retain authority to interpret the plan. And if you have questions about the adequacy of your plan language, ask you attorneys at Fox Rothschild for assistance.