In this New South Wales Supreme Court judgment, the issue was whether the life insured satisfied the definition of “Own Occupation Total and Permanent Disability” under an insurance policy.
The court said that the proper construction of “occupation” in the definition of “Own Occupation” is the employment, trade or business in which that person is habitually engaged and by which that person earns a livelihood or receives some form of remuneration.
The insured’s most recent occupation was that of a construction manager and a project supervisor with his duties detailed in paragraph 66 of the judgment.
The life insured’s post-surgical hip condition did not permit him to safely undertake certain activities in a trench which included walking along a concrete pipe and a trench and undertaking work in a confined space in a trench that might put his hip into an awkward position.
The court said that, as at the current date, the extent of the disability was not such that he was unlikely ever again to be able to engage in his “Own Occupation”. Even the insured accepted that not every job he supervised and managed required him to undertake activities in trenches of the kind he couldn’t now safely perform. The ability to undertake that activity was not essential for him to be able to engage in his own occupation.
The court found that there was no evidence produced to show that the insured was not able to engage in his own occupation. He was in fact at the time of the hearing, engaged in his own occupation.
The court said that it would have come to the same conclusion even if the evidence was that the insured could not safely enter, work in or exit trenches at all.
The court highlighted the importance of the word “Total” in the expression “Own Occupation TPD”, with the policy’s glossary defining TPD to mean in the context “Total and Permanent Disability”.
The court said that “Total” highlights the commercial purpose of the policy as being to provide a benefit when in effect the disability completely (totally) forecloses the life insured’s participation in their “Own Occupation”.
In the circumstances, the policy wasn’t required to respond.
The outcome should be no different under South African law.