Insurers’ exclusion clauses should now explicitly stipulate that the insurance policies cannot be honoured if a hybrid offence is committed.
Evelyne Verrier, partner at the law firm Lavery, makes this argument based on the Supreme Court judgment in the case of Desjardins Financial Security versus the estate of Sébastien Foisy. Verrier believes this judgment establishes jurisprudence.
She confirms that this ruling is of unprecedented importance for the insurance industry. “This judgment ends a controversy over jurisprudence on an expression found in insurance policies. It is a clear decision about direction to take when writing clauses,” she told The Insurance and Investment Journal in an interview.
The judgment demonstrates that the term “indictable offence” does not include hybrid offences, which are criminal offences of medium severity. This type of offence includes impaired driving, assault, and hit-and-run accidents.
Sébastien Foisy died in 2009 after losing control of his motorcycle when trying to evade police, in a chase that occasionally exceeded 200 km/h. The police officer had tried to stop Foisy because he was speeding. Foisy lost control of his motorcycle, and the police officer went off the road in the same spot. The police car then struck Foisy. He was declared dead at the hospital.
Desjardins Financial Security refused to honour Foisy’s $56,000 life insurance policy, arguing that he died while committing a crime. The Québec Superior Court and the Québec Court of Appeal ruled in favour of the attorney for the Foisy estate, citing first that the police chase had ended at the time of the impact, which proved fatal. In addition, dangerous driving is an offence that may be punishable by summary proceedings, and therefore does not constitute an indictable criminal act.
The insurer’s case was denied because the term “indictable offence” includes only so-called “pure” indictable offences, which excludes hybrid or minor offences.
Colossal job ahead
Given the number of policies in force, Verrier says that insurers have “a colossal job ahead of them.”
“Insurance companies must begin to reflect on the objective of this exclusion clause. They must then write and reformulate these clauses,” she says.
Contacted by The Insurance & Investment Journal, Jacques Bouchard, senior public relations advisor at Desjardins Financial Security, mentioned that the insurer has read the judgment and that it has “endeavoured to compensate the estate, to whom the amount has already been remitted.”