The second type of policies, on the other hand, provide a benefit if your disability prevents you from doing your "own occupation." Thus, the trial attorney whose disability prevents her from doing trial work would be covered because she could no longer do her "own occupation." As you've probably figured out, "own occupation" coverage is better, and more expensive than "any occupation" coverage.

Some policies include step-down occupation definitions. The first two years of coverage will be for "own occupation" and then the coverage changes to "any occupation" to age 65.

Most policies define the insured's occupation to be what she is doing at the time she becomes disabled. This sometimes becomes an issue when the insured's disability isn't acute but slowly progresses over time, causing the insured to gradually modify her occupation so that it has changed by the time she files a claim. To cope with her disability, our trial attorney might slowly change her practice to doing mostly appellate work so that, by the time she files her claim, her "own occupation" arguably is no longer that of a trial attorney but of an appellate lawyer, which her disability doesn't prevent her from doing, opening the door for the insurer to argue that she's not disabled under her "own occupation" policy. It might have been better for her to have filed her claim when she was mostly doing trial work so that it was clear that was her "own occupation" when she became disabled (and then she might have been able to collect those benefits and still earn a living doing appellate work).

As you might imagine, there is a lot of litigation over what these occupation definitions mean and how to apply them.

Brenden J. Griffin is a shareholder at Gabroy, Rollman & Bossé, P.C., and has been litigating disability, life, health and ERISA insurance claims for over 10 years. He can be reached at 520.320.1300.

First, make sure ERISA governs. Often, insurance companies claim ERISA governs when it doesn't. The insurance company bears the burden of proving ERISA governs. Make the company prove it. Maybe the employer didn't really sponsor the life, health or disability benefit as part of its employee benefit plan. Maybe you're dealing with an individual policy, which is less likely than a group policy to be considered part of an ERISA plan. If you ask for proof and the insurance company responds with a settlement offer, then that might be a sign that ERISA doesn't really govern.

Second, get involved as early as possible. This might mean getting an attorney to help file the initial claim. Or, if the initial claim has been denied, having the attorney help with the claim appeal process. (ERISA mandates an appeal process.) The claim file will eventually become the closed "administrative record" and you want to make sure it includes everything you need to support your claim. You will have hard time supplementing that record once litigation is started.

Third, use ERISA. Its statutes and regulations provide numerous opportunities for the insurance company to mess up. And insurance companies do mess up. They miss mandatory notice deadlines. They fail to follow administrative appeal procedures. They draft denial letters that are boilerplate rather than being tailored to the claim at issue.

Fourth, look for "conflicts of interest." The assumption underlying the "abuse of discretion" standard is that the insurance company is acting as a claim "fiduciary" and looking out for the employee's best interest. If you can show that the insurance company had a conflict of interest that impacted how the claim was handled, you can argue the abuse of discretion standard shouldn't apply so that the judge can review the claim "de novo." For similar reasons, you can argue that some limited discovery should be allowed to explore that conflict of interest. (Sometimes the "mess ups" mentioned above are the tell-tale signs of a conflict of interest.)

Finally, if a lawsuit is filed, demand attorneys' fees. ERISA allows the prevailing party to seek attorneys' fees. ERISA is a complicated area of the law and, in my experience, many fee applications by counsel for insureds are granted. That means the insurance company doesn't have to worry just about paying it own fees but yours also.

Brenden J. Griffin is a shareholder at Gabroy, Rollman & Bossé, P.C., and has been litigating disability, life, health and ERISA insurance claims for over 10 years. He can be reached at 520.320.1300.

From a claim/litigation standpoint, insurance companies love ERISA because it limits their financial risks and make them more predictable.

First, ERISA preempts state law. That means no state-law claims, like for bad faith or punitive damages.

Second, ERISA's remedies are generally limited to plan benefits, i.e., the underlying benefits at issue (no future benefits, like future disability payments). There is no emotional distress, loss of consortium, or any sort of consequential damages. This allows an insurance company to easily calculate its risk - past benefits, plus interest and attorneys fees. The insurance company doesn't have to worry about the often unpredictable threat "extra-contractual" damages.

Third, ERISA provides federal jurisdiction, so the insurance company always removes ERISA cases to federal court. Insurance companies feel more comfortable in federal court. One reason is because it's usually easier for their lawyers to get admitted pro hac vice in federal court. I know at least one insurance company that used a single law firm to handle almost all of that company's ERISA cases filed in the Ninth Circuit.

Fourth, ERISA changes the "standard of review." In insurance litigation, normally the plaintiff has to prove coverage (e.g., breach of contract, bad faith, etc.) by a preponderance of the evidence. But under ERISA, the insurance policy (usually a group policy called a "plan"), often grants the insurance company (as the "plan administrator") full discretion to decide benefit claims. That means the plaintiff employee has to show that the "plan administrator" abused its discretion in denying benefits. That's a tough standard to meet. The insurance company's decision doesn't have to be the correct one, but one that is merely reasonable - not "arbitrary and capricious."

Fifth, ERISA doesn't permit discovery. Instead, the litigation is basically treated as an "appeal" from an administrative claims process, so the "record on appeal" is limited to the claim file. A corollary to this is that there is no discovery. You can't, for example, depose the claims handler.

Finally, ERISA precludes a jury. ERISA cases are tried to the judge, usually as a "paper trial" through motion practice and submitting the claim file, i.e., the closed "administrative record."

What can the insured do about all this?  Not much.  But see Part 2 of this blog for some things that can help.

Brenden J. Griffin is a shareholder at Gabroy, Rollman & Bossé, P.C., and has been litigating disability, life, health and ERISA insurance claims for over 10 years. He can be reached at 520.320.1300.

There are two broad categories of disabilty of insurance: short-term vs. long-term. As the name implies, short-term disability (STD) provides benefits for a short time, usually three to nine months. Long-term disability (LTD) provides benefits for a disability that has lasted longer than such short periods, usually referred to as an "elimination period." The length of LTD coverage varies, but most policies provide benefits from after the "elimination period" to age 65 (although coverage may end sooner for certain type of disabilities, e.g., mental-health disabilities). Some people self-insure for the period of short-term disability and purchase insurance only for long-term disability.

Brenden J. Griffin is a shareholder at Gabroy, Rollman & Bossé, P.C., and has been litigating disability, life, health and ERISA insurance claims for over 10 years.  He can be reached at 520.320.1300.