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Thursday, September 8, 2011

Should employers include a “drunk driving” benefit exclusion in their death and disability policies? Two recent court cases illustrate that these provisions may determine whether or not an employee is entitled to benefits for injuries that occur while intoxicated.

In Allen v. Standard Insurance Co., an employee was found to be intoxicated when she drove to work, crossed the centerline into oncoming traffic, hit a truck head-on and suffered severe head injuries. Because the long-term disability policy provided by her employer limited benefits for disabilities related to substance abuse, the district court ruled that the employer properly limited her benefits because her disability was caused by a drunk driving accident.

In Thies v. Life Insurance Co. of North America, an employee was found to be intoxicated when he crashed a jet ski and died. His employer-provided life insurance policy did not include a drunk driving benefit exclusion. The district court ruled the plan administrator acted arbitrarily in denying benefits to the employee’s children on the grounds that he was drunk. The court noted there is no current case law that automatically denies benefits for injury or death resulting from operating a vehicle while intoxicated. The court also rejected the argument that the injury was self-inflicted because the employee voluntarily drank alcohol.

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