Case Study: What Does “Material and Substantial” Mean?

In 2007, the Georgia Court of Appeals had to address this question in Pomerance v. Berkshire Life Insurance Company of America. 654 S.E.2d. 638 (2007). Alan Pomerance was an obstetrician/gynecologist with four disability insurance policies from Berkshire. These policies provided own-occupation coverage, meaning that “total disability” was defined as “your inability to perform the material and substantial duties of your occupation.”

Dr. Pomerance’s occupational duties included delivering babies, surgeries, C-sections, office visits, making hospital rounds, and being on call.  After being diagnosed with a degenerative knee condition, Dr. Pomerance filed a total disability claim with Berkshire, explaining that he could no longer stand for long period of time, so he couldn’t perform deliveries and hospital surgeries, be on call, or assist in the emergency room.  Because of his disability, Dr. Pomerance was forced to restrict his practice solely to wellness office visits, which included patient exams, counseling, nonsurgical care, and minor biopsies, but none of his other former duties.

Berkshire declined to pay Dr. Pomerance total disability benefits, arguing that he was only partially disabled because he could still perform one of his “substantial” duties, i.e., office visits.  Dr. Pomerance contacted Berkshire and objected to its determination, but Berkshire still refused him total disability benefits.  Dr. Pomerance filed suit against Berkshire, claiming breach of contract and bad faith refusal to pay the amounts owed. 

According to the Georgia Court of Appeals, whether Dr. Pomerance was totally disabled depended on what the policies meant by “substantial duties.”  The Court found that the term “substantial” could be interpreted in one of two ways:

  1.  “Substantial” can have a qualitative meaning and be defined as “important” or “essential”, meaning that the insured is totally disabled if he cannot perform his important and material duties; or
  2.  “Substantial” can have a quantitative meaning and be defined as “considerable in quantity” or “significantly great” in amount, meaning that an insured is totally disabled if he cannot perform a significantly great amount of his material duties.

According to the Court, if the term “substantial” had the first definition—i.e., “important”—then the word would be interchangeable with “material,” a term also used in the policy definition.  Thus, the Court held:

in order to avoid rendering the term “material” as mere surplusage, we must construe the term “substantial” as having the quantitative meaning of “considerable in quantity” or “significantly great” in amount.

With the definition of “total disability” clarified, the Court sent the case back to the trial court to determine whether or not Dr. Pomerance met that definition or not.

As this case shows, interpreting your disability insurance policy can be complicated.  The insurance company may argue that a word means one thing, and the courts in your state may think it means another.  If you have questions about what certain words in your policy might mean, you should consult a disability insurance attorney that can tell you how your state’s courts interpret them.