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In Florida, and throughout the country, mediation of complex insurance disputes (whether a disability insurance dispute, health insurance dispute, or otherwise) is a common strategic option employed to resolve the conflict before litigation.  Through the mediation process, the involved parties — insurer and policyholder — can negotiate a favorable settlement that satisfies their expectations while avoiding the hassles and difficulties typically associated with insurance litigation. Litigation May Be Fraught With Difficulties Litigation can be somewhat risky for many plaintiffs, whether in the insurance context or otherwise.  Going through with trial litigation can be time-consuming, expensive, emotionally frustrating, and uncertain.  For example, if you have suffered a disabling injury and are unable to return to work, then the prospect of litigation — and the possibility of a long and demanding trial process — may be undesirable. Generally speaking, insurance policyholders hope to secure benefits within a reasonable timeframe.  Litigation not only extends that period, but may expose the policyholder (and their insurance dispute) to public criticism, thus damaging other aspects of their life.  Thus, where possible, a negotiated settlement is usually preferred. How Mediation Can Lead to a Favorable Settlement Litigation is fundamentally hostile — each side is arrayed against the other, constantly seeking an advantage.  By contrast, mediation is a voluntary process where the disputing parties attempt to negotiate a settlement compromise in a more collaborative environment.  During a mediation, a neutral third-party mediator is selected.  The mediator will hear out the arguments presented by each party (in a less […]

Residual disability benefits are common, in Florida and throughout the country — whether in the form of an insurance rider on a total coverage plan, or as a standalone income replacement policy — as a means with which to ensure that the claimant can secure at least some benefits after suffering a disabling event that is not necessarily catastrophic. For example, if you are injured in a car accident, then you may suffer a disability in the form of back spasms, but this disability may not be “total” in the sense that you might be capable of performing your existing job.  Residual benefits open up insurance coverage, to an extent, by allowing you to recover for disabilities that effect certain job duties, but that do not necessarily prevent you from working altogether. Despite the fact that residual benefits are intended to fill the coverage gaps typical of total disability insurance policies, many insurers will challenge residual benefits claims and make it difficult for claimants to secure the benefits to which they’re entitled. Qualifying for Benefits Whether you actually qualify for residual benefits depends on the particularities of your insurance plan — there is no universal, consistent baseline for residual benefits, as plans can vary quite substantially.  Residual benefits are a form of partial income replacement, and as such, many plans involve a showing of income loss of a sufficiently significant degree.  For example, your plan may require that you demonstrate — post-disability — that your income has fallen at least […]

Disability insurance coverage can surprise many policyholders who put too much trust in their insurer to “do right” by them.  All too often, disability insurance policyholders believe that they are well-protected by their private policy, only to find that their insurer is taking steps to avoid or minimize the payout altogether. In many cases, the insurance contract itself includes language that could expose the policyholder to a dispute down the line, when they have actually been disabled.  It is increasingly common for insurers to include a limitation on benefits for disability claims that are premised on psychiatric conditions (i.e., mental disorders) — this limitation is commonly referred to as the “mental and nervous” provision. Let’s briefly consider the fundamentals. How the Mental and Nervous Provision Works Claimants may be initially confused by the application of the “mental and nervous” provision in their insurance policy, but it’s rather simple in effect.  The provision essentially limits the duration of benefits payments for disability claims where the cause of the disability at-issue is based exclusively on a psychiatric condition. Generally speaking, only the length of payments are limited, not the amount.  For example, if you have been suffering from a substance abuse condition (say, alcoholism), and the addiction is so serious that it has effectively rendered you disabled and unable to work, then you may be entitled to benefits, but only for a limited period of time — perhaps a two-year period. Insurance policies can vary quite a bit, but as a general […]

The Employee Retirement Income Security Act (ERISA) established certain standards for qualifying plans — more specifically, for private employee benefit plans — that are intended to protect employee-claimants from abuse, mismanagement, and various other concerns commonly encountered in the insurance dispute context.  Over the years, ERISA has been expanded quite substantially.  If your insurance plan is governed by ERISA regulation, you may be entitled to notification and the opportunity to appeal an adverse decision relating to your benefits. What is an Adverse Benefit Determination? Pursuant to existing ERISA regulation, an “adverse benefit determination” is any decision by the insurer that involves the denial, reduction, or termination of an insurance benefit. For example, if your insurer chooses to reduce your benefits on the basis of improvements in your disabling condition, then that would almost certainly constitute an adverse benefit determination. Adverse benefit determinations afford the claimant certain rights necessary to protect their interests.  When an insurer (plan covered by ERISA) makes an adverse benefit determination, they must provide adequate notice of the decision.  Further, the claimant must be given the opportunity to appeal within 180 days of the adverse benefit determination at-issue.  This 180-day rule gives the claimant a significant time period with which to secure qualified legal assistance and challenge the insurer’s decision. Insurance Plan Administrator Must Give a Reasonable Basis for the Determination Discretionary authority of insurers in ERISA-covered plans is limited.  Any and all adverse benefit determinations must be accompanied by an explanation that gives a reasonable basis […]

Oftentimes — in Florida and elsewhere — insurers will deny otherwise legitimate claims due to the coverage having lapsed.  Insurance coverage will lapse when the claimant has failed to make a premium payment before the applicable due date.  This applies to all types of insurance coverage, from disability insurance to health insurance to property insurance, and more.  If the coverage lapsed before the events giving rise to the claim (i.e., an accident that renders you disabled), then you may not be entitled to receive benefits under the policy at issue. It’s important to note, however, that there are a number of tools that give claimants “extra” time to make a premium payment before coverage lapses.  Further, insurers have certain duties that they must adhere to — failure to do so may lead to a determination that the coverage has not actually lapsed. Consider the following counter-arguments to an insurance denial that is justified on the basis of a lapsed policy. Grace Period Still Applicable Your insurance policy grace period covers you in the event that you fail to make a premium payment on time.  Though every insurance plan is different (and that applies to grace periods, too), generally speaking, grace periods will last for roughly two to three months after the missed payment.  If you fail to pay for your outstanding premiums before the grace period finishes, then the policy will be deemed “lapsed” at the time of the original missed payment. For example, suppose that you miss your March […]

Disability claimants may be surprised to find that — despite the fact that they have never lapsed on insurance payments and are submitting a reasonable disability benefits claim — the insurer response is unaccommodating.  Disability insurers employ a number of questionable tactics in order to force the claimant into a vulnerable position.  For example, if you have been rendered permanently disabled due to a degenerative condition, the insurer may deny your claim, delay your claim, or undervalue your claim.  Doing so gives the insurer substantial leverage during later negotiations. Oftentimes, disability insurers use the “lump sum buyout” to avoid having to pay long-term benefits, or to end the insurance dispute altogether.  Lump sum buyouts are not necessarily unfavorable to the claimant, however.  Accepting a lump sum buyout is a perfectly reasonable option in some cases. Let’s explore the basics of an insurance buyout. What is a Lump Sum Buyout? In the disability insurance context, a lump sum buyout — otherwise known as an insurance settlement — is effectively an offer to purchase the claim at-issue.  Stated simply, the insurer offers to pay some agreed-upon amount in a lump sum, and you (the disability claimant) must agree to abandon your legal rights under the policy.  You will not be entitled to receive further benefits under the policy, nor will you be entitled to sue the insurer for damages. Lump sum buyouts are often used as a way to clean up what may appear to a messy insurance dispute.  For example, rather […]

In 1974, the Employee Retirement Income Security Act (ERISA) was enacted, thus creating new standards governing private employee benefit plans — such as employer-sponsored disability, health, and welfare insurance, among other plans.  In Florida and elsewhere, ERISA does not require that employers purchase private insurance coverage for their employees, but it does impose a stricter set of rules on such plans so that employee-policyholders are protected from the potential abuses of plan administrators and others. If you are a private employee in Florida, and you are a participant in an employee-sponsored benefits plan, then in all likelihood your plan is ERISA-covered.  This not only ensures that your plan will be governed by federal law (i.e., ERISA regulation), as opposed to Florida law, but also subjects you to various advantages and disadvantages when it comes to litigating claims against the insurer. Consider the following. Fiduciary Duties Give Rise to Legal Action ERISA establishes a range of fiduciary duties and obligations, which gives policyholders new opportunities to sue and recover damages for fiduciary violations.  For example, suppose that you are a policyholder in an employer-sponsored welfare plan.  You later discover that the funds were mishandled by the fiduciaries (i.e., the plan administrator and their agents), and this will have a substantial impact on your later benefits.  You would be entitled under ERISA to sue the fiduciaries and secure damages as compensation for your various losses. Florida Bad Faith Law is Preempted Under state law, section 624.155 of the Florida Statutes establishes bad […]

Most businesses in Florida and elsewhere purchase some form of commercial general liability (CGL) insurance coverage so as to avoid the potentially disruptive effect of a personal injury lawsuit brought against the business. For example, a small retail business with few assets may only have enough funds to cover costs — if a customer slips-and-falls on the premises, and thus severely injures themselves, then the ensuing lawsuit could seriously disrupt (and even bankrupt) the business. CGL insurance coverage is fairly expansive, and covers all damages associated with the policyholder’s negligence (in a business context).  As a CGL policyholder, however, you may find that the insurer denies coverage due to an exclusion of which you were not fully aware. In fact, certain exclusions are rather common in the CGL insurance context, so it’s important to take them into consideration when submitting a claim (and ultimately, when challenging the adverse decision of your insurer). Consider the following. Intentional Acts Generally speaking, intentional acts are not covered by CGL insurance — only negligent acts are covered.  For example, if you have a negative relationship with a particular customer, and in a bout of anger, you shove the customer to the ground and cause them to suffer injuries, then your CGL insurer will likely avoid a payout due to the intentional nature of the act at issue. No Business Pursuit Involved CGL insurance policyholders are not entitled to submit a claim for benefits for liabilities sustained in a situation that is unrelated to their […]

Oftentimes, insurance policyholders who are already receiving benefits (or who intend to submit an application for benefits) are concerned about how their qualification for such benefits will be influenced by their success in litigation.  This is a reasonable concern, of course — it seems sensible that one’s disability benefits may be affected by their receipt of hundreds of thousands of dollars, or even millions of dollars in damages from the liable defendant in a personal injury lawsuit. In reality, however, the effect of a settlement or verdict on one’s receipt of benefits is not necessarily straightforward.  Whether these concerns are valid is fundamentally dependent on the circumstances. Let’s take a brief look at the situation. Income-Based Benefits May Be Affected In Florida, as in other states, private insurance coverage — such as disability insurance, health insurance, and property insurance, among other policies — is generally not affected by the receipt of damages in a settlement or verdict.  It’s a rather simple calculus, in fact.  Private benefits are typically not awarded based on “financial need” or income, and so by securing substantial financial resources through a lawsuit, you do not influence the provision of benefits under your existing coverage. For example, suppose that you have entered into an agreement for private disability insurance coverage.  You subsequently are involved in a motor vehicle accident where you suffer injuries that give rise to a disabling condition.  In your lawsuit, however, you are awarded $1M in damages. Unless your policy includes some provision that […]

In Florida, and throughout the country, whether you receive disability benefits — and the benefits amount that you are awarded by your insurer — depends largely on the disabling condition at-issue and the provisions of insurance policy.  As policies can vary quite substantially, you and your attorney will have to closely evaluate the language of your insurance agreement in order to determine the benefits to which you’re entitled. Generally speaking, the disability benefits calculation begins with the insurer’s determination of your condition.  Some policies have stricter, more restrictive definitions of “disability,” which require that the policyholder demonstrate that they cannot work any job (not just their current job).  In any case, if you qualify as “disabled” under the plan, then you may receive disability benefits. Benefits are very likely to differ based on the structure of your disability insurance plan, however.  Let’s take a look. Percentage-Based Income Replacement In the private disability insurance context, the benefits you receive are often a critical issue in negotiations when initially signing onto an insurance plan.  Percentage-based benefits are desirable for knowledge workers and other white-collar workers with high monthly wages.  For example, if you are a medical professional earning $20,000 per month, then 50 percent of your monthly wages in benefits will be $10,000 — though it represents a substantial drop in total income, it is likely to be sufficient to cover your immediate financial needs. Benefits Capped Out Bear in mind that in many policies where the benefits are paid out based […]