What an LTD Lawsuit Claims

What an LTD lawsuit claims is set by the policy, because the action is a breach of contract claim against the insurer. The insurer promised to pay a monthly benefit on stated conditions and stopped. The remedies follow from that promise, and they are narrower and more concrete than most people expect.

Arrears of Unpaid Benefits

The first head is the money already owed: every monthly payment from the date benefits stopped to the date of judgment or settlement, calculated on the policy’s own formula and reduced by the offsets in the policy, including the deduction described in the CPP disability offset chapter. This is arithmetic once entitlement is decided, which is why entitlement is where the fight actually happens.

Reinstatement or a Lump Sum for Future Benefits

The second head is what happens going forward. A court can declare that you remain entitled and order the insurer to resume monthly payments, leaving the policy alive and the insurer free to reassess you later. Where the insurer has repudiated the contract outright, damages for future benefits can be awarded instead, discounted for early receipt and for the chance of recovery before the policy’s end date. Most resolutions between the parties take the lump sum route, because it ends the relationship.

Damages for Bad Faith and Mental Distress

The third head concerns how the claim was handled instead of whether it was owed. The Supreme Court of Canada held in Fidler v. Sun Life Assurance Co. of Canada that a disability policy is bought for the security it provides and not only for the money, so damages for mental distress can follow a wrongful denial where that distress was within the contemplation of the parties. Punitive damages are separate and rarer, requiring conduct that is a marked departure from ordinary standards of decent behaviour, the standard set in Whiten v. Pilot Insurance Co. Both decisions are published among the Supreme Court of Canada judgments on CanLII.

Interest and Costs

Prejudgment interest runs on the arrears under each province’s judicature legislation, and a successful plaintiff normally recovers a portion of legal costs from the insurer. Neither head is large enough to drive a case, and both differ across the four provinces, which is one reason the governing province matters as much as it does in the deadline to sue.

What an LTD Lawsuit Claims and What It Leaves Out

An LTD action does not sue your employer, and it does not include damages for pain and suffering caused by the underlying illness or injury, which belong to a tort claim against whoever caused it, if anyone did. It also does not restore benefits the policy never covered, which is why the definition in own occupation and any occupation governs the whole case. The firm takes disability denial files with no fee unless the claim resolves, and the steps are set out in what the firm does on a denial file. Every claim type the firm takes is listed on the injury law areas hub.