Nallan v. Union Labor Life Insurance Company, 42 N.Y.2d 884 (1977)

An ‘accident’ in the context of insurance policies is defined from the viewpoint of the insured, considering whether the event was unexpected, unusual, and unforeseen by them.

Summary

Nallan, a mechanical engineer, was shot while entering an office building for work and a union meeting. He received worker’s compensation and then sought additional medical expense coverage under his major medical insurance policy. The policy excluded coverage for accidental bodily injury arising out of and in the course of employment. The New York Court of Appeals held that because Nallan did not expect or foresee the shooting, his injuries were accidental under the policy’s terms, but the exclusion for work-related injuries applied, barring his claim. This case clarifies how ‘accident’ is defined in insurance contexts.

Facts

Plaintiff Nallan, a mechanical engineer, was employed by Nallan Associates, Inc.

He was shot in the back by an unknown assailant while entering an office building in New York City.

His purpose for being in the building was to deliver sound equipment to a customer and attend a union meeting.

He received worker’s compensation benefits for his injuries.

He sought additional coverage for medical expenses under a major medical insurance policy issued by the defendant, Union Labor Life Insurance Company.

The policy excluded coverage for medical charges incurred as a result of “accidental bodily injury arising out of and in the course of the individual’s employment”.

Procedural History

The trial court held that Nallan was precluded from obtaining benefits due to the policy exclusion.

The Appellate Division affirmed the trial court’s decision.

The New York Court of Appeals granted leave to appeal.

Issue(s)

Whether the shooting of the plaintiff can be deemed an ‘accident’ within the meaning of the insurance policy, despite occurring during the course of his employment.

Holding

No, because the policy excluded coverage for accidental bodily injury arising out of and in the course of the individual’s employment, and the plaintiff’s injuries fell within that exclusion.

Court’s Reasoning

The Court of Appeals defined an ‘accident’ as “an event which * * * is unusual and unexpected by the person to whom it happens”. The court stated: “Whether or not a certain result is accidental is usually determined by looking at the casualty from the point of view of the insured to see whether or not from his point of view the event was unexpected, unusual and unforeseen”. Because Nallan did not expect or foresee the shooting, the injuries were deemed accidental from his perspective. However, the court emphasized that the specific policy provision excluded coverage for accidental injuries arising out of and in the course of employment. The court found that this exclusion applied here, as Nallan’s injuries were covered by worker’s compensation. The court distinguished cases involving express exclusions for intentionally inflicted injuries, which were not at issue here. The court concluded that the policy provision was “intended to exclude from coverage those accidental injuries for which, as here, workmen’s compensation relief is available”. The dissent was not specified.