Catastrophic Impairment, what do you need to know and what is new


Catastrophic impairment is a “hot topic”, to say the less, in the field of the accidents benefits and insurance companies. But, why is so important? Why is so polemic? We can resume to one main point, the money involve.

When a person is seeking to receive a benefit from an insurance company, being classified under the category of “catastrophic impairment” could represent a big difference in the amount of money that the person can receive from the insurance company.


Where we can find the definition of catastrophic impairment?

In Ontario, the Statutory Accident Benefits Schedule (SABS), define in his clauses 2(1.2)(f) and (g) what we can consider as a catastrophic impairment. Basically, the law define it as follow:


For the purposes of this Regulation, a catastrophic impairment caused by an accident is,

  1. paraplegia or quadriplegia;
  2. the amputation or other impairment causing the total and permanent loss of use of an arm or a leg;
  3. the total loss of vision in both eyes;
  4. subject to subsection (4), brain impairment that, in respect of an accident, results in,
    1. a score of 9 or less on the Glasgow Coma Scale as published in Jennett, B. and Teasdale, G.,Management of Head Injuries, Contemporary Neurology  Series, Volume 20, F.A. Davis Company, Philadelphia, 1981, according to a test administered within a reasonable period of time after the accident by a person trained for that purpose, or
    2. a score of 2 (vegetative) or 3 (severe disability) on the Glasgow Outcome Scale, as published in Jennett, B. and Bond, M., Assessment of Outcome After Severe Brain Damage, Lancet i:480, 1975, according to a test administered more than six months after the accident by a person trained for that purpose;
  5. subject to subsections (4), (5) and (6), an impairment or combination of impairments that, in accordance with the American Medical Association’s Guides to the Evaluation of Permanent Impairment, 4th edition, 1993, results in 55 per cent or more impairment of the whole person; or
  6. subject to subsections (4), (5) and (6), an impairment that, in accordance with the American Medical Association’s Guides to the Evaluation of Permanent Impairment, 4th edition, 1993, results in a class 4 impairment (marked impairment) or class 5 impairment (extreme impairment) due to mental or behavioral disorder.


What about case law?

Being a main issue in the field of the accident benefits, is reasonable that exists a lot of case law related with what we can consider and we cannot consider as catastrophic impairment. We can mentioned two recent important cases related with the catastrophic impairment definition

  • Aviva and Pastore (2012 ONCA 642) : in this case, the Ontario Court of Appeal stated that is enough be markedly impaired in one of the four of her activities of daily living , social functioning, concentration and deterioration on the job, to the person be considered under the category of catastrophic impair and ask for a higher compensation.
  • Kusnierz v. The Economical Mutual Insurance  (2010 ONSC 5749): in this case,Ontario Court of Appeal found that is possible combine psychological and physical impairments to reach the “minimum” percentage required to be consider as a case of catastrophic impairment.


What is new?

Recently, on June 12, 2012, the Ministry of Finance released the Superintendent’s Report on the Definition of Catastrophic Impairment in the Statutory Accident Benefits Schedule, which is the new project related with catastrophic impairment, the purpose is to ensure that the most seriously injured accident victims are treated fairly.

The government directed consult with the medical community to amend the definition of catastrophic impairment as set out in the Statutory Accident Benefits Schedule, and to set out which need to be the qualifications and general requirements for health professionals who conduct catastrophic impairment evaluations.


What is next?

The definition of catastrophic impairment still will be a hot topic in the near future because involves economic issues and have a great impact in the insurance companies, who pressure  the Ontario government to define and clarify the extent and limits of this concept, because certainty about this is important to both sides, companies and insured people. Is just a matter of time to see what direction is going to take this definition and how is going to impact the insurance industry.

Carlos Vera is a Paralegal student at Centennial College in Toronto studying professional communications with Omar Ha-Redeye.


  1. Atul Jaiswal

    Hi Carlos,

    Very well written article. Could you please provide me any information on latest developments on this issue. I have not seen any specific report or article in 2015 on it. I am doing a research on this topic – Catastrophic Impairment – proposed changes and its impact.

    • Hi Atul,

      The definition of Catastrophic Impairment changed in 2016 as per the Bulletin from the Financial Services Commission of Ontario (FSCO). It goes into effective on June 1, 2016 in Ontario.

      Below is an excerpt from the bulletin:

      “The amendment under paragraph 2 of subsection 3.1 (1), “severe impairment of ambulatory mobility or use of an arm, or amputation,” clarifies the requirement that only one of the three listed provisions must be met for an insured person to have sustained a catastrophic impairment as a result of an automobile accident. The provision is amended by adding the language “one of” and now reads:

      “Severe impairment of ambulatory mobility or use of an arm, or amputation that meets one of the following criteria:”

      Effective Date

      This amendment comes into effect on June 1, 2016. Please make sure that your claims staff and any other staff who may be affected by this amendment are informed of this change. Also ensure that you make any operational changes that are required to implement this change by the effective date.

      The Insurance Act and regulations can be downloaded from the e-laws website at The filed regulation making this amendment is O.Reg.116/16 and is expected to be published in a future edition of The Ontario Gazette.


Leave a Reply

Your email address will not be published. Required fields are marked *