Many people are covered by accidental death insurance in the workplace. A claim on such a policy will often be refused, and now with the 11^th Circuit's decision in Goldfarb v. Reliance Standard Life Ins. Co., No. 23-10309 (11th Cir. July 2, 2024), one has to wonder how far courts will take the opinion.

Dr. Goldfarb had a $500,000 Reliance Standard Life Ins. Co. accidental death policy on his life through his employment as a senior medical director. He was an experienced mountain climber, and at age 57 undertook to climb Pastore Peak in Pakistan, which reached 20,365 feet. He was in excellent shape for the climb. His ultimate goal was to climb an even higher mountain named Broad Peak nearby, but he thought it best to attempt Pastore Peak first.

While partially up the mountain, a guide went on ahead of Dr. Goldfarb to scout conditions. He found the conditions very dangerous, as there were many hidden crevices covered by snow, loose stones, an unstable snowy path, and black ice that was breaking apart and provided no grip in many places. The guide estimated that conditions would be even worse higher up the mountain. He warned Dr. Goldfarb about this. Dr. Goldfarb understood but decided to sleep on it at the camp. However, the guide went back to the base camp lower down the mountain.

The next morning Dr. Goldfarb phoned his guide to tell him he was going to continue climbing the mountain alone. The guide warned him that it would be more dangerous alone and that he could not take any responsibility if Dr. Goldfarb continued. Dr. Goldfarb waited a day again and then communicated with the expedition's liaison officer advising that he was going to continue the climb. After that call he was never heard from again and his body was never recovered.

About three days after the call, no one had heard from Dr. Goldfarb and concern arose. A helicopter spotted an unidentified body face down in the snow.  It was believed that this was Dr. Goldfarb and he had fallen to his death. However, the body could not be reached, and it never was recovered despite several subsequent efforts.

A claim was made by the sons of Dr. Goldfarb on the accidental death policy, but Reliance Standard refused to pay that claim. It contended that Dr. Goldfarb did not die “solely from an accident” as required in the policy. A lawsuit was filed in the district court, and the judge ruled in favor of Dr. Goldfarb's sons. However, Reliance Standard appealed that decision.

The 11^th Circuit then embarked on what I hope is not its own slippery slope. It noted that in this policy there was no definition of “accident” so the Court would use the common-law definition. Under the common-law, the term “accident” meant the insured subjectively did not expect the likelihood of death from engaging in the conduct. In this instance, despite the danger, it was unknowable to determine whether Dr. Goldfarb believed that his conduct would likely end his life.

The First Circuit had encountered this problem of not knowing the insureds' expectations, so it added a bit to that standard in its Wickman v. Northwestern Nat'l Ins. Co. case.  It determined that if the subjective expectations of the insured were unknowable, then the court would utilize a reasonable person standard. The court would look to a reasonable person with similar characteristics to the insured.

In this instance, the 11^th Circuit believed that since the insured's expectations were unknowable, it would look to a reasonable experienced mountain climber standard. It opined that a reasonable mountain climber might not have proceeded with the climb under the circumstances. Reliance Standard, under the arbitrary and capricious standard of review, had a right to interpret that evidence and the Court owed it deference. It was not unreasonable for it to contend that an experienced reasonable mountain climber would have expected or intended to die from this climb. Thus the 11^th Circuit reversed the district court decision and ruled that that Reliance Standard did not have to pay the claim.

This decision should be of great concern to anyone who has an accidental death policy through the workplace in the 11^th Circuit. This Circuit may now be on its own slippery slope. If the policy has reserved discretion, then what will be viewed as an adequate warning when the insured's expectations are not knowable? Is a warning on a medication bottle enough - such as don't operate heavy machinery? What about a warning in your car manual? What about a warning from an overly cautious spouse or parent? My concern is that if there is a death and if there is any type of warning, that may be adequate for the insurer to deny the claim. The policies are then worthless.  

In this case, I believe that Dr. Goldfarb thought he could handle the conditions with diligent care. I am sure he did not view it as a “suicide” adventure.  He considered matters for two days. As it stands now, an accidental death and dismemberment policy may well be on its own slippery slope of illusory coverage. Better make a very strong claim record and refute every basis to deny the claim. Having a better case is not enough to win in the 11^th. You have to show the utter lack of any reasonable basis upon which to deny the claim.