This is a case study from Jim’s days as an Insurer Representative.
Managing a litigated disability case in itself is a challenge. There are many variables that can impact the outcome. Defense counsels approach, Plaintiff counsels approach, and ultimately the plaintiff himself or herself. The most effective way to resolve these cases is through the mediation process.
The Insured was a 57 year old labourer who filed a disability claim for a condition of alcohol abuse. The Policy required him to be under active treatment for his condition and in an approved Rehab facility before he could receive payment of his long term disability (LTD) benefit. The Insured did not see himself as an alcoholic nor did he feel he needed any treatment, even though his illness was impacting his ability to work. He simply wanted the insurer to pay his benefits as he had paid his premiums. His LTD claim was denied and he sought legal advice. Ultimately a Notice of Civil claim was filed against the Insurer.
The Insured was also released by his employer for not returning to work. A grievance was filed and later dropped by his Union in part due to the Insureds lack of cooperation.
Did the Insured meet the necessary terms of the Policy in order to receive LTD benefits?
The Insurer filed a Defence to the action. The parties exchanged documents and the claim was assessed by Jim and Defence counsel. The documents produced suggested that the Insured was not a well educated man and had worked in his labour type job for over 25 years. Documents also suggested he had a possible psychological disorder that could have contributed to his lack of awareness in regards to his alcohol abuse. During the course of the litigation Plaintiffs counsel advised the Insured was not doing well and asked if the case could possibly be mediated in an attempt to resolve the legal action. After discussion with Counsel, mediation was agreed upon.
At the mediation Jim had on an opportunity to meet the Insured and ask him questions. In listening to the details provided by the Insured, Jim was able to assess the Insureds situation and his credibility.
The Insureds Counsel could relate to his clients situation and his abuse problems, and wanted to help him as well as advocate for his client. The mediator, who could play a critical role in the mediation, also saw that the Insured needed help.
Jim and Defence counsel were still relying on the Policy wording and the Insureds lack of treatment for his condition. They were also assessing the case in part based on the Insureds presentation at the mediation and his obvious lack of understanding of the illness that was inflicting him. We maintained a strong position on the Policy requirements that the Insured be in a treatment program.
This was a difficult set of facts and personalities play a big role in attempting to resolve these types of litigated cases. After some pressure from the Insureds Counsel and reconsideration of the case, we conceded that his problem would not get any better unless he sought treatment and until then, he would not be able to function in his own, or any job.
It was clear that the Insured would not ever be able to return to his previous job as the company had released him. His prospects for other employment were minimal, especially given his continued alcohol abuse and lack of treatment.
Jim recognised this and offered to resolve the legal action for a sum of money that would assist the Insured in resolving his debt and provide him with funds while he attempted to recover. The obstacle for the Insured was his chronic alcoholism and without treatment he was not going to succeed. His Counsel asked Jim to include sufficient funds in the settlement to pay for an in-house treatment program. Jim was reluctant to do so, given the uncertainty as to whether the Insured would use the funds for treatment.
Jim countered with an offer, proposing the Insurer would set aside $10,000.00 for the Insured if he elected to enter a program, and if he did so, the funds would be paid directly to the in-house treatment facility on behalf of the Insured. The law suit was resolved on that basis.
A year later, Jim received a telephone call from a treatment facility. The Insured had decided he needed help and entered the treatment facility, fully funded by the Insurer. The Insured received the help he needed and later secured employment.
It took the Insured 1 year to decide to enter treatment and without the unique offer made by Jim, he may not have received the necessary treatment he desperately required. Jim’s analysis of the situation generated the solution to the Insureds problem when he committed to treatment, and resulted in a positive outcome for the Insureds well being.
This is the outside the box thinking needed to manage these types of claims – Analysis Generating Solutions.