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Ben Glass
Ben Glass
Attorney • (703) 584-7277

Why Do Employers Buy Bad Disability Insurance?

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Several months ago we were sitting in the huge conference room of the very well heeled law firm hired by a major disability insurance company. We sat around a large ornate conference room table.

My client, unable to work because of a number of illnesses that had befallen him, had wondered what this mediation would be like. Eighteen months earlier his doctors had told him that he would have to give up the job that he loved because he just could not do the material and substantial duties that the job required.

His doctors had actually been telling him to stop working for years. He had hung in there though because he didn’t want to admit that he could no longer do the work and frankly he loved the work that he did. He had trusted that his employer’s long-term disability insurance policy would protect him and his family in the event that the day came that he finally gave in to his doctor’s demands.

Reluctantly, he had filed his disability claim and despite all of the information provided by him and his doctors and his employer his claim had been denied. He had gone through the internal appeals process with the insurance company, but at each step of the way claims adjustors told him that he could work. The doctors working for the insurance company never examined him, but they did review his records and all of the reports that his own physicians had provided, and they too said, “you can work.”

Left with no other choice we had filed suit in federal court against one of the largest disability insurers in the world. Now, having gone through the litigation process we had been invited to a mediation session. The insurance company flew in an executive from the “home office”, and each side pitched in to pay half of the fee of an experienced mediator. We were all going to try to put a price on the value of my client’s inability to work.

During that morning my client got to tell his story to the insurance company executive and the lawyer the insurance company had hired. He poured out his heart to explain how he had struggled for years to keep on doing the work that he loved.

But it was the insurance company’s time to talk directly to my client. Both the lawyer and the insurance company executive looked across the table. They each explained that they were “sorry” that my client had had to go through all that he had gone through. They explained that they were only doing their jobs. They looked across the table and looked directly into my client’s eyes and said:

we wish we could pay you more money, but we are sorry that your employer did not buy the best policy. We can only pay you based upon the language of this policy your employer bought.

No law requires an employer to buy disability insurance but when they do they should at least make sure they aren’t buying illusory coverage.