The Sixth Circuit, reversing a district court opinion, found that Zurich American Insurance Company abused its discretion in determining that the loss of a claimant’s leg in a motorcycle accident was not “accidental” simply because he was intoxicated, and that Zurich’s denial of benefits under the group “accidental death and dismemberment” (AD&D) policy was arbitrary and capricious. The Court rejected Zurich’s conclusion that the claimant’s intoxication amounted to a “self-inflicted wound” (an exclusion in the policy), and found that while the claimant intentionally drank in excess, he did not intentionally harm himself. The Court specifically noted that while drunk driving is ill-advised, there are many other activities that can also lead to car wrecks that would be considered “accidental”, and moral judgment should not influence interpretation of the policy provisions. The Court distinguished this case from the leading Sixth Circuit case that upheld the denial of benefits based on the much lower level of intoxication and less dramatic circumstances of the crash. Most importantly for ERISA claimants in general was the Sixth Circuit’s re-iteration that the arbitrary and capricious standard of review does not mandate the courts to simply rubber-stamp the administrator’s decision, but requires a review of the quality and quantity of the evidence on both sides of the issues. Kovach v. Zurich American Ins. Co.
