Evidence of the intention of the parties outside of the insurance contract may be used to establish the terms of the contract

Appeal of declaration of entitlement to long-term disability benefits to age 65 allowed, the Court finding that the insured was only entitled to long-term disability benefits for two years.

McGarry v. Co-operators Life Insurance Co., [2011] B.C.J. No. 773, April 28, 2011, British Columbia Court of Appeal, K.C. Mackenzie, P.D. Lowry and C.E. Hinkson JJ.A.

The insurer appealed from a summary trial order declaring that the insured was entitled to disability benefits under a group insurance policy. The insurer had argued that the insured’s long-term disability benefits under the policy had a two year limit. The insured claimed that she was entitled to receive benefits until age 65.

The Court of Appeal allowed the appeal finding that the contract of insurance, correctly interpreted, provided only for “own occupation” long-term disability coverage and only for a maximum of two years. The Court of Appeal found that the Trial Court had failed to consider evidence which established the intention of the parties which was consistent with the contract of insurance providing long-term disability coverage for a maximum of only two years.

This case was digested by Cameron B. Elder and edited by David W. Pilley of Harper Grey LLP.

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