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ombudsman news

issue 44

March 2005

personal accident insurance: surgical complications

Personal accident policies are one of the clearest examples of non-indemnity insurance contracts. In other words, their aim is not to return you (so far as reasonably possible) to the position you were in before the actual occurrence of the event you insured yourself against. Instead, the policies simply pay a financial benefit if that event occurs.

If your car is damaged, your motor insurer can indemnify you — by repairing or replacing the car (or, if it chooses, by paying a cash sum in lieu of repair or replacement). If you accidentally lose an eye, your personal accident insurer cannot repair or replace the eye, but it can pay you a lump sum to compensate you for the loss.

Most personal accident policies pay out only if the policyholder suffers "accidental bodily injury or death solely and directly as a result of an external, violent and visible cause", or words to that effect. There are usually defined benefits for certain injuries depending on the level of cover purchased, for example, £10,000 for loss of use of a limb, £8,000 for loss of an eye, £80,000 for permanent total disablement, etc.

Many cases are relatively straightforward: if you are involved in an accident which results in permanent "bodily injury" as defined in the policy, then you receive the appropriate sum for that type of injury.

Sometimes there are issues about whether the injury was the sole and direct result of the accident, particularly in the case of orthopaedic injuries where pre-existing degenerative changes may have contributed towards the disability. However, these cases can usually be resolved by reference to appropriate medical evidence. If, for example, the evidence establishes that the accident caused only 10% of the injury — the other 90% being due to degenerative change — then we would usually ask the insurer to pay 10% of the benefit. This is on the basis of good industry practice: many insurers voluntarily make a proportionate contribution if the accident is shown to have accelerated pre-existing degenerative changes.

A recent High Court judgment — Blackburn Rovers Football & Athletic Club plc v Avon Insurance plc & others [15 November 2004] — indicates that only abnormal degenerative changes should be taken account of when limiting or excluding a claim. Mr Justice Moore-Bick held that a clause in a personal accident policy which excluded disablement caused directly or indirectly by degenerative conditions should not apply. The injured professional footballer suffered normal degenerative change for a man of his age and occupation. Accordingly, the judge considered this should be disregarded when assessing whether his injury was caused solely and independently of any other cause:

"I have reached the conclusion that [the exclusion] must be construed as referring to degenerative conditions that are abnormal in their degree and of sufficient severity to amount to an illness. For the same reason I do not think a normal degree of degeneration is to be regarded as a "cause" of injury when considering the definition of Accidental Bodily Injury."

The judge also stated that "it has been recognised for a long time that the court should lean against construing a policy of insurance in a way that would substantially deprive the insured of the protection which the policy is designed to provide." This corresponds with our view that it is neither fair nor reasonable to use the mere presence of degenerative change to exclude genuine personal accident claims, which such policies are clearly designed to respond to.

More problematic are cases that concern surgical complications. All surgery involves an element of risk. Even with a "textbook" procedure where everything goes according to plan, there is a chance, albeit minimal, that the patient will react badly during or after the operation. This is why surgeons are under a duty to warn their patients of the potential risks, however small. Indeed, in a controversial judgment a majority of the House of Lords recently held that a surgeon’s failure to warn made him liable for all the reasonably foreseeable consequences of the surgery, even where the surgery itself was not carried out negligently: (Chester v Afshar, reported [2004] in Volume 4 of the All England Law Reports at page 587.)

Among the disputes referred to us, we have seen a number of cases where the policyholder died or was injured following surgery. The insurer has usually rejected the personal accident claim on the basis that the bodily injury or death was not caused accidentally and/or was not the sole and direct result of an external, violent and visible cause. When dealing with these cases, we try to distinguish between:

  • cases where the patient was simply unlucky enough to fall into the small class of those who inevitably and unavoidably suffer complications as a result of surgery; and
  • cases where something unplanned or negligent happened before, during or after the surgery.

These cases are very difficult and we share many of the insurance industry’s reservations about treating surgical complications as accidents. However, even case law indicates that we ought to distinguish between those situations where the injury is a potentially natural result of the procedure (for example, where cutting into a particular part of the body might result in injury) and situations where injury – although a possibility – is not the natural result of the procedure (for example, where the wrong part of the body has been cut).

All surgery carries some risk, but it is usually possible to isolate those cases where something accidental has caused the injury. And those are the cases that we consider it fair and reasonable for personal accident insurers to meet.

case studies

personal accident insurance: surgical complications


Mr T underwent minor surgery to correct a prolapsed disc. The operation appeared to be uneventful. However, during recovery Mr T complained of tightness in his neck and eventually he was rushed to intensive care, where he died. The coroner concluded that the cause of death was haemorrhaging from a vertebral artery. When the insurer rejected the personal accident claim brought by Mr T’s widow, she complained to us.

complaint upheld
The weight of the medical evidence indicated that the surgeon had negligently torn or cut the artery during the surgery. We felt that this was not a natural consequence of the risks inherent in surgery. Something had gone wrong and this was not what any of the parties to the surgery had anticipated.

The injury was not the natural result of the procedure as it was solely and directly caused by external, violent and visible means. The injury therefore fell within the scope of the policy. When we put this argument to the insurer, it agreed to meet the claim.


Mrs G had an operation to remove a lump from her neck. During recovery, the wound started to bleed profusely, resulting in a massive haemorrhage. As a result of this, Mrs G died.

The insurer rejected a claim made by Mrs G’s husband on their personal accident policy. It said that Mrs G’s death had resulted from the complications of planned surgery – rather than from an accident. Mr G then brought his complaint to us.

complaint rejected
There was nothing to suggest that this was an accident. The medical reports and the coroner’s inquest cleared the surgeons of any wrongdoing. No error had occurred during the operation. Mrs G was just one of the very few unfortunate patients who react badly to this type of surgical intervention.

The bodily injury here was a natural, though tragic, consequence of the surgery. It was an anticipated risk which Mrs G had consented to, insofar as the general risks of surgical complications had been explained to her. So despite sympathising with Mr G’s situation, we could not agree that the insurer had acted unfairly or unreasonably.

Walter Merricks, chief ombudsman

ombudsman news issue 44 [PDF format]

ombudsman news gives general information on the position at the date of publication. It is not a definitive statement of the law, our approach or our procedure.

The illustrative case studies are based broadly on real-life cases, but are not precedents. Individual cases are decided on their own facts.