In June 2025, an Australian court held that the critical question was whether the life assured was unlikely ever again to be able to engage in his own occupation; by focusing on the activities he could do following his hip replacement compared to what he did when he worked for his pre-disability employer MMA.

The critical question was whether the insured life, as a consequence of his hip replacement was unlikely ever again to be able to engage in the occupation in which he was engaged immediately before his operation.

The insured employer MMA sought to recover its full indemnity of AU$2,954,908 under the life and total & permanent disability insurance policy issued to MMA on the basis that the insured life did not return to work for MMA but for another employer.

The focus is on the activities which the insured life could do following his hip replacement compared to what he did when he worked for MMA. The evidence showed that the insured life’s work for MMA as a construction site supervisor was largely supervision and it was not an essential part of his job or occupation that he needed to perform some manual work while in the trenches.

The court therefore did not analyse the meaning of the words out of context. Even though the purpose of the policy was to protect MMA against the possibility that, as a result of an injury, the employee would not be able to continue to work for it, the word “occupation” as used in the definition of “own occupation” should be interpreted consistently with the purpose of providing protection to the employer. The question was whether the services of the employee were no longer available to MMA because of his disability.

The court embarked largely on a factual enquiry in relation to the position of the life assured and the evidence as to what he could do before and after the hip replacement. Most of the activities complained of were activities that the medical practitioners who gave evidence agreed the employee could continue to do.

This would be the correct enquiry under South African law. “Own occupation” does not mean the occupation with a particular employer that was carried on before the disability arose.

Murphy McCarthy and Associates (Pty) Ltd v Zurich Australia Limited [2025] NSWCA 131