Widow Denied $1,000,000 Following Aircraft Accident

Written on February 13, 2012.

A recent decision of the British Columbia Supreme Court highlights the limited coverage that is available for aviation accidents through some life insurance policies (McLean v. Canadian Premier Life Insurance Co., [2012] B.C.J. No. 198). On August 3, 2008, the plaintiff’s husband Mark McLean, and four others, were killed as a result of the crash of a Pacific Coastal Airlines Grumman Goose just north of Port Alice, British Columbia.

The flight was chartered by Seaspan to transport Mr. McLean and five other Seaspan employees from Port Hardy to Chamiss Bay, B.C. The flight had been arranged and paid for by Seaspan. It was carrying Seaspan employees only and was not available to any member of the public. Seaspan had given instructions as to the destination, the departure time and the names of the employees who were to travel on the flight. The times of departure and arrival were set by Seaspan so as to co-ordinate the arrival of its employees with the time when the barge and a tugboat were available.

The Policy in question policy was purchased in 2007 as a group policy available to individuals who held Sears charge accounts. It provided for payment of $1,000,000 if the plaintiff could establish that Mr. McLean died as a direct result of an airplane crash while he was “… riding as a fare paying passenger inside …” a common carrier. The issue for determination by the Court was whether the aircraft in which Mr. McLean was a passenger at the time of his death was a “common carrier” as that term is defined in the policy.

The policy defined “common carrier” as follows: COMMON CARRIER means a public conveyance which is:

 1.             licensed to transport passengers for hire; and

2.             provided and operated (a) for regular passenger service by land, water or air, and (b) on a regular passenger route with a definite regular schedule of departures and arrivals between established and recognized points of departure and arrival; and

3.             provided and operated under a Common Carrier license at the time of the Loss.

The Court observed that “to be a common carrier, a person or business entity must be available to carry any passengers no matter who they may be. If the service is available only to certain passengers and not to the public at large, the carrier cannot be a common carrier, but is operating under a special contract: Whelan v. Parsons and Sons Transportation Ltd., 2004 NLSCTD 34.”

The Court concluded that the definition of “common carrier” under the Policy referred to the particular aircraft utilized for the charter flight. Although that aircraft was available to operate within the definition of “common carrier” and to be within terms of the policy, it was not operating within that definition at the time of the accident. As a result, the plaintiff was denied the accidental death payment of $1,000,000. Instead the policy provided for a payment of $25,000.