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Denial of Individual Disability Insurance Benefits and Bad Faith

Unlike ERISA, breach of contract and bad faith claims are for a jury to decide your benefits and other compensation. Taking a close look at the definition of “disability” in the insurance contract is the first step. This contract which you paid premiums for and the insurance company deposited your money will be Exhibit Number 1 when we go to court.  Many policies divide the definition of disability into the inability to perform one's “own occupation” and the inability to perform “any occupation”. Depending on the policy, an individual may continue to receive disability benefits through age 65 or for lifetime benefits if he or she can establish the definition of disability through medical and vocational evidence.

In addition to bringing a breach of contract claim for the failure of the insurance company to pay your disability benefits, state law provides for additional damages for bad faith. In other words, the insurance company may owe you more than the coverage in the policy. Once you become insured under the policy, the insurance company is prohibited from unreasonably withholding disability benefits from you. Examples of bad faith may be established when the insurance company twists the language in the denial letter from the actual policy, failing to investigate a claim; unreasonably delaying payment and unreasonably denying benefits to a claim. If proven to be dishonest, deceptive or fraudulent, a judgment may be obtained and in some states punitive damages awarded exceeding the benefits due under the policy compensation as punishment for bad faith and to deter similar conduct in the future.

Free Consultation

Please contact us for a free consultation with Greg concerning the denial of short-term or long-term disability benefits. Most clients prefer to have a contingency fee agreement, which means attorney fees are are payable if we are successful.

ERISA Experience

Greg Paul has 18 years experience fighting for long-term disability benefits against insurance companies such as Aetna, CIGNA, Guardian, Hartford, Liberty Mutual, Mutual of Omaha, Principal, Prudential, Reliance Standard, Standard, Sun Life, and Unum.