An Ontario court has broadened the meaning of "employed" under auto benefits law, overturning Allstate's denial of income replacement to a paraplegic accident victim.
In a decision released March 31, 2026, the Divisional Court of the Ontario Superior Court of Justice reversed a Licence Appeal Tribunal ruling and found that Josef Coban was entitled to pursue income replacement benefits under the Statutory Accident Benefits Schedule - even though his income came from a workers' compensation program, not directly from his employer.
The case traces back to 2014, when Coban, a contractor, was hurt on the job. Unable to return to his trade, he entered a Work Transition Plan through the Workplace Safety and Insurance Board to retrain as an architectural technologist. He enrolled at Algonquin College and eventually took on eight hours of work per week at an architectural firm, Cole & Associates Architects Inc. Cole did not pay him. His income - $651.51 per week - came from the WSIB, contingent on his compliance with the retraining plan, which included his work at the firm.
On October 6, 2018, everything changed. Coban was in a car accident that left him a paraplegic, unable to work or attend school. His WSIB benefits were reduced.
He turned to his auto insurer, Allstate Insurance Company, for income replacement benefits under section 5(1) of the SABS. That provision entitles an insured person to benefits if they were "employed at the time of the accident" and, as a result, suffer a substantial inability to perform the essential tasks of that job.
Allstate denied the claim. Its position: Coban was not "employed" because his income came from the WSIB, not from Cole. The Licence Appeal Tribunal agreed, finding that "employed" required remuneration received "in exchange" for services to an employer. Since Coban would have received the same WSIB payments regardless of whether he worked at Cole, the Tribunal concluded the income was not connected to his work.
The Divisional Court disagreed. Writing for the three-judge panel, Justice Schreck found the Tribunal's reading too narrow and based on a misapplication of an earlier decision, Arab v. Unica Insurance, 2022 ONSC 5761. That case, the court clarified, turned on whether the claimant was receiving any income at all — not on whether it flowed directly from an employer.
The court reminded that the SABS is consumer protection legislation, designed to cover economic losses and ease the hardship caused by motor vehicle accidents. Where a claimant's income comes from, the court said, is not what matters. What counts is the existence of an employment relationship and the receipt of employment-related income lost because of the accident.
Coban, the court noted, was receiving WSIB benefits not by choice, but because he was a victim of a workplace injury. Denying him auto insurance benefits on top of that, the court wrote, was "neither reasonable nor just."
The Tribunal's decision was set aside and the matter sent back for a new hearing before a different adjudicator. Allstate was ordered to pay costs of $16,600.
