Valid Medical Certificate Required for Coverage

In a recent ruling, the Alberta Court of the Queen’s Bench corrected an earlier decision which found that a pilot’s estate was entitled to insurance coverage for loss of an aircraft, despite the fact that the pilot’s medical certificate had expired.

Nicholas Gudzinski took out an insurance policy (the “policy”) on his Cessna 177B Cardinal. The policy listed Gudzinski as an approved pilot and provided coverage:

“only if your aircraft is flown by an approved pilot … who has the required license or endorsements to fly your aircraft.”

On August 19, 2006, Mr. Gudzinski was killed when he lost control of the aircraft after making a slow-speed pass at a low altitude.  Gudzinski was issued a Canadian private pilot’s license in 1993.  However, his most recent medical certificate had expired on June 1, 2005.  Gudzinski’s estate claimed $60,000 for damages to the Cessna as a result of the crash.  The insurer denied the claim, stating that because Gudzinski did not have a valid medical certificate at the time of the crash he did not have the required license under the policy.

The executor of the estate filed a claim against the insurer, seeking recovery for the damage to the aircraft.  The question was whether Gudzinski, flying without a valid medical certificate, held the “required license” under the policy.

The lower court concluded that the failure to keep a valid medical certificate does not result in the revocation of the pilot’s licence but merely that the holder shall not exercise the privileges of the licence – that is, the ability to legally operate the aircraft.  The court held that Gudzinski was covered by the policy because he held the required pilot’s licence even if he could not legally operate the Cessna.

On appeal, the court allowed the introduction of new evidence, including the wording found on a private pilot licence and aviation medical certificate issued by Transport Canada, which provide, in part:

“This Licence is valid only for the period specified in the Medical Certificate which must accompany this licence.”

“This (medical) certificate is part of a Personnel Permit or Licence issued under the CARS.  It constitutes medical validation and must be carried with the Permit or Licence it validates.”

The court held that there was no ambiguity in the words “required” and “licence”, which must be interpreted to mean “required by law”.  It was not disputed that Gudzinski’s licence, without a valid medical certificate, did not allow him to legally operate the Cessna.

As a result, the court held that it would be illogical for a policy to cover someone with an invalid licence.  A “required license” under the policy means that the licence must be valid – it must allow for the legal operation of the aircraft.  Gudzinski did not have a valid medical certificate at the time of the crash, was not able to legally operate the Cessna and therefore did not have the “required license.”  The court found that it would stretch “the bounds of common sense to find that an invalid license is still a license and that insurance coverage is valid.”

The court found that the original decision was wrong and allowed the appeal.  The $60,000 claim under the policy was denied.