Very often, a person who is disabled and entitled to insurance under an employer’s long-term disability insurance policy is forced to challenge the denial of the claim, through time-consuming appeals and litigation.  The insurance companies often seek to take advantage of the disabled individual’s inability to earn a living and thus the inability to wage a legal battle to obtain the insurance benefits.  If the insurance company is not forced to pay the claimant’s attorneys’ fees or interest on the benefits wrongfully withheld, the insurance company has little incentive to pay the claims on time. 

 

Fortunately, a new decision by the federal appeals court in New York, Slupinski v. First Unum, recognizes the need to force insurance companies to pay not only the claimant’s attorneys’ fees, but also interest on the unpaid benefits.  The court clarified that an insurance company does not need to act “frivolously” in order for a court to award attorneys’ fees against the company, highlighting the broad scope of cases in which attorneys’ fees must be awarded.  Also, the court found that a carrier’s decision to initially pay benefits before wrongfully terminating them later does not insulate it from having to pay attorneys’ fees.  In other words, simply doing what the law requires for a while does not protect a carrier from fully compensating a claimant when it wrongfully stops doing so later. 

 

Although insurance companies enjoy an overwhelming advantage at all stages of the claims and appeals process -- both time and money are on their side -- attorneys’ fees awards are designed to “level the playing field” for claimants and make sure that they are compensated for all of the damages they suffer as a result of a carrier’s wrongful termination.  The Slupinski case shows that the court takes this important purpose seriously, and if carriers abuse their advantage, the court will make them pay for it.

 
Kevin Schlosser and Robert C. Angelillo are both attorneys of the Disability Insurance Claims law practice at Meyer, Suozzi, English & Klein, P.C.. 

 

 

 

Kevin Schlosser

516-592-5709

 

Robert C. Angelillo

516-592-5784