When—due to a disability—an employee can no longer work, they could qualify for long-term
disability insurance. Long-term disability insurance can provide them with financial assistance to
compensate for their lost income. Insurance coverage usually provides about 65% of a disabled
employee’s regular income.
Long-term disability insurance is covered under a contractual agreement between the insurance
provider and the insured employee. Therefore, if an insured disabled employee is unable to work
and submits a valid claim and the insurance provider denies the claim, the employee can take
legal action against the insurance provider. An insurance provider’s denial of a valid long-term
disability insurance claim constitutes a contractual breach. Therefore, the insured employee can
respond by seeking civil compensation (“damages for unpaid benefits”) from the court from the
insurance provider for wrongdoing.
Of course, the employee can also seek damages from the insurance provider for their mental
anguish if that insurance provider denies a valid claim. In addition to constituting a contractual
breach, an insurance provider’s denial of a valid claim constitutes a violation of their implicit
duty of good faith, and the employee can respond to this claim denial by seeking damages for
their mental anguish.
In Fidler v. Sun Life Assurance Co. of Canada, 2006 SCC 30, the Supreme Court of Canada
ruled that the contractual parties’ expectations at the time they entered into the contract
determine the awarding of damages. Accordingly, the courts would award damages in cases
where the contractual parties envisioned that a contractual breach would cause psychological
anguish and the mental anguish that the breach precipitated was adequate to justify the awarding
of damages. The conduct of the insurance company will be closely scrutinized by the court and
you need an experienced disability lawyer to help you prove the bad faith and mental anguish
that you suffered.
If you have a disability that prevents you from working and your insurance provider has denied
your claim for long-term disability benefits, call McNally Gervan today at 613-238-1424. They
will focus on obtaining the compensation you deserve so that you can reclaim your peace of
mind.
