- The National Financial Ombud Scheme upheld an insurer’s rejection of a death claim after finding the policy’s criminal conduct exclusion applied to the fatal shooting during arrest.
- The Ombud found the insurer had proven on a balance of probabilities that the death arose directly from criminal conduct, justifying the refusal to pay.
- The ruling reinforces that insurance exclusions define the limits of cover and must be clearly understood by policyholders before a claim arises.
The Life Insurance Division of the National Financial Ombud Scheme has upheld an insurer’s rejection of a death claim after finding that the insured’s fatal shooting arose from alleged criminal conduct, triggering a clear policy exclusion.
The matter turned on the scope and application of an insurance exclusion clause that expressly barred payment where the insured event was caused directly or indirectly by criminal conduct, including circumstances where the insured was under investigation, being prosecuted, or had been convicted of a criminal offence.
Background to the claim
According to the evidence before the Ombud, police officers were attempting to arrest the deceased when he allegedly seized a firearm from one of the officers and attempted to discharge it. He was then fatally shot by other officers at the scene.
There was no evidence presented to the insurer that contradicted the police account. On that basis, the insurer concluded that the death arose directly from criminal conduct and fell squarely within the policy exclusion. The claim was therefore declined.
When the matter was reviewed by the Ombud, the central question was whether the insurer had discharged its evidentiary burden in relying on the exclusion.
“Our office agreed that the insurer was not contractually obliged to pay the claim, and the decision to decline it was justified,” said Denise Gabriels, Lead Ombud of the Life Insurance Division. She added that the matter illustrates how exclusions can significantly impact the outcome of a claim.
Understanding insurance exclusions
Insurance exclusions are provisions that specify circumstances under which claims will not be paid, even though a policy is active and premiums are up to date. They reflect the long-standing principle that insurance is intended to protect against unforeseen risks rather than deliberate or unlawful acts.
“Insurance exclusions are not hidden traps. They are fundamental to how insurance works. For policyholders, understanding exclusions is just as important as knowing what is covered. By reading carefully and asking questions, policyholders can ensure they are adequately protected and avoid unpleasant surprises when it matters most,” Gabriels said.
Common exclusions in life and related policies typically include criminal acts, hazardous pursuits such as skydiving or mountaineering, pre-existing medical conditions diagnosed before inception of the policy, and losses linked to war or terrorism. Intentional acts, including suicide or self-inflicted injury within a defined initial period of the policy, are also commonly excluded.
Who must prove an exclusion?
In disputes of this nature, the evidentiary framework is well established. The policyholder or beneficiary must first prove that a valid policy exists and that the insured event occurred, such as death, disability, or diagnosis of a covered condition.
Once that threshold is met, the burden shifts to the insurer. If the insurer relies on an insurance exclusion to reject the claim, it must prove on a balance of probabilities that the exclusion clearly applies. This may require medical records, toxicology or pathology reports, accident documentation, or police findings, depending on the circumstances.
If the insurer cannot demonstrate that the exclusion applies, the claim must be paid. In this matter, however, the uncontested evidence was sufficient to justify the insurer’s decision.
Gabriels emphasised that exclusions do not render insurance meaningless but instead define its boundaries. “Exclusions don’t mean your insurance won’t work. They define when it will. Knowing what is excluded, where to find exclusions in your policy, and who must prove they apply puts the insured in a much stronger position,” she said.
She urged consumers to interrogate their policies carefully. “When taking out cover, ask questions about exclusions you don’t understand. Keep copies of all disclosures you made during the application. Read the policy document carefully and make sure you understand its contents. If anything is unclear, contact the insurer or adviser for clarification. If the policy does not accurately reflect the information provided during the application, request that it be corrected.
“Insurance is about peace of mind. Understanding exclusions helps ensure that peace of mind lasts when you need it most,” Gabriels added.
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