Can You Sue Your Insurance Company for Invasion of Privacy?

We’ve talked before about how insurers often hire private investigators to follow and investigate claimants.  While the purported goal is to find claimants who are “scamming the system” and faking a disability, investigators often employ invasive tactics in their attempts to gather videos and other information requested by insurers.

Unfortunately, all too often investigators go too far and claimants feel threatened or endangered by these investigators’ actions. The question then arises–at what point do insurance companies become legally liable for the actions of investigators that they hired?  Can you sue your insurance company for invasion of privacy?

At least one court thinks so. In Dishman v. Unum Life Insurance Company of America, 269 F.3d 974 (9th Cir. 2001), the Court agreed with Dishman that he could sue Unum for tortious invasion of privacy committed by investigative firms hired by Unum. In this case, the investigative firms in question aggressively attempted to find out employment information on Dishman by (1) falsely claiming to be a bank loan officer; (2) telling neighbors and acquaintances that Dishman had volunteered to coach a basketball team and using that as a pretext to request background information about Dishman; (3) successfully obtaining personal credit card information and travel itineraries by impersonating Dishman; (4) falsely identifying themselves when they were caught photographing Dishman’s residence; and (5) repeatedly calling Dishman’s house and either hanging up or harassing the person who answered for information about Dishman.

Because the underlying Unum disability insurance policy was an ERISA policy, the Court assessed whether Dishman’s invasion of privacy claim (which was based on California law) was precluded by statutory language which states that ERISA “shall supersede any and all state laws insofar as they . . . relate to any employee benefit plan.” 29 U.S.C. Sec. 1144 (a).  The Court, in its decision, went on to discuss a lack of consensus on this issue, but ultimately ruled that, in this particular instance, “[t]hough there is clearly some relationship between the conduct alleged and the administration of the plan, it is not enough of a relationship to warrant preemption” of state tort law, because Dishman’s “damages for invasion of privacy remain whether or not Unum ultimately pays his claim.” In other words, the Court explained, ERISA law does not provide Unum with blanket immunity for “garden variety tort[s] which only peripherally impact plan administration.”

It should be noted the Court in Dishman cautioned that there is no consensus regarding how far ERISA reaches, and not every disability is governed by ERISA, so not every court will necessarily reach the same conclusion as the Dishman court. This is a complicated area of the law, and whether or not you can sue your insurer for invasion of privacy will largely depend on the facts of the case, the type of policy you have, whether your jurisdiction recognizes an “invasion of privacy” cause of action, and the existing case law in your jurisdiction.

Information offered purely for general informational purposes and not intended to create an attorney-client relationship.  Anyone reading this post should not act on any information contained herein without seeking professional counsel from an attorney.

I used to practice __________ but now I’m _____________?

You spent years in school and invested countless hours to establish and maintain your practice.  You even protected this investment by purchasing a disability policy.  Yet, if you do become disabled and make a claim, your insurer might still make the argument that you are only trying to retire and get paid for it.  Unfortunately, disability insurance claims by doctors and other healthcare professionals are especially targeted for denial or termination.

When you are disabled and are no longer able to practice in your profession, it may seem logical to simply refer to yourself as “retired,” especially if you are not working in another capacity.  While it’s certainly understandable that you may not want to explain to everyone who asks why you’ve hung up your lab coat, you need to keep in mind that innocently referring to yourself as retired will likely prompt your insurer to subject your claim to higher scrutiny.  Insurance companies often attempt to take statements out of context in order to deny or terminate benefits by alleging that a legitimately disabled claimant is:

  • Malingering
  • Making a lifestyle choice.
  • Unmotivated by or unsatisfied with work.
  • Embracing the sick role.

Remember, in the insurance company’s mind, there is a big difference between “disabled” and “retired.” Below are some common situations where you should avoid referring to yourself as retired:

  • When asked for your profession on claim forms.
  • When talking to your doctors or filling out medical paperwork.
  • On your taxes, other financial forms, and applications.
  • Around the office.
  • At social functions or gatherings.
  • On social media.

Insurers can—and often do—employ private investigators to follow claimants on social media; interview staff, family, or acquaintances; and track down “paper trail” documents (such as professional license renewal forms, loan applications, etc.) to see if you have made any statements that could be construed as inconsistent with your disability claim.  Insurers also routinely request medical records and may even contact your doctor(s) directly regarding your disability.  So, for example, saying something off-hand or even jokingly, such as “I’m retired—I can stay out as late as I want now!” to your doctor, or at a social event like a block party, could lead to your insurer trying to deny your claim if they later spoke to your doctor or your neighbor.

While the focus of your claim should be on your condition and how it prevents you from working, insurance companies can latch on to innocent statements like this in an effort to deny legitimate claims. Eschewing the word “retirement” is a good and easy first step to help avoid unwanted and unwarranted scrutiny from insurers.

New Methods of Surveillance: Part 2 – Drones

In Part 1 of this post, we discussed “stingrays”—a relatively new technology that is becoming more and more common. In Part 2, we will be discussing another new technology that is becoming increasingly prevalent as a surveillance tool—drones.

What is a “Drone”?

The term “drone” is a broad term that refers to aircrafts that are not manned by a human pilot.  Some drones are controlled by an operator on the ground using remote control.  Other drones are controlled by on-board computers and do not require a human operator.  Drones were initially developed primarily for military use.  Recently, drones have also been utilized for a wide range of non-military uses, such as aerial surveying, filmmaking, law enforcement, search and rescue, commercial surveillance, scientific research, surveying, disaster relief, archaeology, and hobby and recreational use.

How Does Drone Surveillance Work?

Typically, drones are connected to some type of control system using a data link and a wireless connection.  Drones can be outfitted with a wide variety of surveillance tools, including live video, infrared, and heat-sensing cameras.  Drones can also contain Wi-Fi sensors or cell tower simulators (aka “stingrays”) that can be used to track locations of cell phones.  Drones can even contain wireless devices capable of delivering spyware to a phone or computers.

Conclusion

Over the past few years, several new methods of surveillance have been developed.  These new technologies create a high risk of abuse, and as they become more and more commonplace and affordable, that risk will only increase.  Unfortunately, in the area of surveillance, the law has not always been able to keep up with the pace of technology.  In many respects, the rules regarding the use of new surveillance technologies remain unclear.  Consequently, the most effective way to guard against intrusions of privacy is to be aware of the expanding abilities of existing technology, because you never know when someone could be conducting surveillance.

References:

ACLU Website: https://theyarewatching.org/technology/drones.

New Methods of Surveillance: Part 1 – “Stingrays”

In previous posts, we have discussed how insurance companies will hire private investigators to conduct surveillance on disability claimants.  In the next two posts, we will be discussing some modern surveillance technologies that most people are not very familiar with – “stingrays” and drones.

What is a “Stingray”?

A “stingray” is a cell site simulator that can be used to track the location of wireless phones, tablets, and computers—basically anything that uses a cell phone network.

How Does Stingray Surveillance Work?

A “stingray” imitates cell towers and picks up on unique signals sent out by individuals attempting to use the cell phone network.  The unique signal sent out is sometimes referred to as an International Mobile Subscriber Identity (IMSI) and it consists of a 12 to 15 digit number.

Once the “stingray” connects to a device’s signal, it can collect information stored on the device. Usually the information collected is locational data, which is then used to track the movement of individual carrying the device.

Additionally, some “stingray” devices can intercept and extract usage information, such as call records, text messages, and Internet search history, from devices it connects to.  Some “stingrays” are even able to intercept phone call conversations and deliver malicious software to personal devices.

Stay tuned for Part 2, where we will discuss drone surveillance.

References:

ACLU Website: https://theyarewatching.org/technology/stingray.

Unum Bases Its Decision to Deny Benefits on Surveillance of the Wrong Person

A recent disability insurance case from the Southern District of California, Barbour v. Unum Life Insurance Company of America, 803 F. Supp. 2d 1135 (S.D. Cal. 2011), illustrates yet another way in which insurers sometimes improperly use surveillance to deny or terminate policyholders’ claims.  In this instance, Unum (parent company of Paul Revere, Provident, and UnumProvident) actually based its decision to deny a claimant benefits on surveillance footage of the wrong person.

Patricia Barbour was insured under a group disability insurance plan through her job as a school principal.  Ms. Barbour filed a claim under her policy due to “severe right quadrant abdominal pain—inflammation small intestines,” for which she had undergone two hernia surgeries, with serious complications.  She and her physician explained to Unum that her condition restricted her from driving, walking or standing, and sitting for extended periods of time, and that she was totally disabled from performing hers or any other occupation.  Ms. Barbour also reported that she used a cane, and that she needed her mother’s help for her daily activities.

As typically occurs, Ms. Barbour’s claims consultant at Unum retained a private investigator to perform three days of surveillance on Ms. Barbour.

Continue reading “Unum Bases Its Decision to Deny Benefits on Surveillance of the Wrong Person”

Authorization Forms: What Information Are You Releasing to Your Disability Insurer?

Whenever you file a claim for benefits with a disability insurance company, you will be asked to complete numerous forms.  One of these forms is always a HIPAA-compliant Authorization. This form is titled differently depending on the insurer in question, for instance:

  • Authorization to Obtain Information (Guardian/Berkshire)
  • Authorization for Release and Disclosure of Health Related Information (Sun Life)
  • Authorization (MetLife, Unum, Northwestern Mutual)
  • Authorization for Release of Personal Health and Other Information (Principal)
  • Authorization for Release of Personal Health-Related Information (MassMutual)

Claimants often sign the Authorization with little more than a quick glance, unaware of the broad power they are giving their insurer to investigate nearly every aspect of their lives. This may seem like an exaggeration, but take a look at this paragraph from an actual Authorization form required by one of the leading disability insurers for doctors and dentists.

Authorization large

Many claimants think that the Authorization simply allows the insurer to collect medical records.  However, this Authorization, like those we typically see from other disability insurers, lets the company request all kinds of documents from all kinds of people and agencies.  It also allows various company representatives to speak directly with numerous people in a claimant’s life.  Let’s examine what you would authorize by agreeing to this one paragraph:

Continue reading “Authorization Forms: What Information Are You Releasing to Your Disability Insurer?”

Surveillance of Disability Claimants: When Are Private Investigators Watching?

As we have discussed in the past, surveillance is a tool commonly used by disability insurance companies to analyze – and often deny – legitimate disability claims.  When surveillance is taken out of context or misconstrued, it can lead to unfair disability denials.

All too often, disability insurance companies expect people with disabilities to stay at home, in bed.  What they fail to realize is that most doctors actually encourage disabled claimants to try some activities of daily living, light physical therapy, or social interaction.  Just because a disabled person can eat chips at a restaurant with family doesn’t mean he can perform all of the duties of his former occupation.  Nevertheless, disability insurers often try to get any physical activity on camera and use it as proof that the claimant is not disabled.

Many people filing for private disability wonder exactly when private investigators are watching them.  After years of dealing with disability insurance detectives, we have recognized the five most popular times for surveillance of policyholders:

  • During holidays. This is when policyholders are likely to be out of the house enjoying time with family and friends.
  • On the claimant’s birthday. Just as on holidays, a disabled claimant is likely to push themselves to get out and enjoy the day.
  • Over weekends. During weekends, insureds or more likely to attempt minor errands or go outside with family.
  • Any time they have a chance of catching  a claimant engaged in physical activitybased on information provided by the claimant on activity logs and in interviews. For example, if the claimant wrote on an activity log that he takes his dogs out in the morning, the private investigator will be there with a camera to document the insured walking in the yard.
  • Near the end of fiscal quarters, when the insurance company is under pressure to save money by denying or terminating claims.

Disability Claim Investigation: What Can My Insurance Company Do?

What your disability insurance company can do when it is investigating a claim largely depends on your specific circumstances and the language in your policy, but there are some common tactics that Arizona courts will often allow – and some they will not.

What the disability insurance company can do

  1. Audit your tax returns and billing records
  2. Review your medical files
  3. Use a private investigator to conduct video and photograph surveillance
  4. Look at your public Facebook profile and pictures
  5. Follow you on Twitter
  6. Order an Independent Medical Exam
  7. Have an insurance company doctor opine about your disability
  8. Ask for a Functional Capacity Evaluation
  9. Contact your treating physician
  10. Schedule face-to-face interviews with you
  11. Interview your family, friends, co-workers and employees
  12. Demand precise quantifications of your time spent in every professional activity pre- and post-disability
  13. Pay your claim under a reservation of rights

What the disability insurance company cannot do

  1. Impose requirements on you that are not in your policy
  2. Attempt to influence the opinions of independent medical examiners
  3. Misrepresent policy provisions
  4. Conduct abusive interviews
  5. Unfairly delay a decision on your claim
  6. Fail to conduct a timely, adequate investigation of your disability claim
  7. Destroy key documents
  8. Lie about actions taken on a claim
  9. Place their financial interests ahead of your contractual rights
  10. Force you to litigate by offering an unreasonably low lump-sum buyout

When it comes to claims investigation, disability insurance companies often skirt the limits of what they can legally do. If you think your insurer might be acting in bad faith, contact an attorney to protect your disability benefits.

An Inside Look at Insurer Surveillance

Insurers often spy on insureds in an attempt to “catch” them appearing non-disabled. Traditionally, insurers have hired private investigators to videotape insureds in their daily routines. More recently, insurers have begun to use Facebook and other social media as a one-way mirror for electronically peeping into an insured’s private life. Old fashioned stakeouts and video surveillance are alive and well, however. Because it is so easy to misconstrue even a few seconds of video footage, all insureds need to be aware of the possibility for surveillance.

A recent article written by the insurance industry and aimed at insurers exposes the way insurers regard surveillance. Though the article cites a private investigator as saying that surveillance is the “unbiased documentation of a person’s activities,” the reality is anything but. Insurers will hire PIs to watch a claimant for days, and then purport that a single fifteen-second clip of the insured watering his outdoor plants, for example, is evidence of a fraudulent claim. They fail to understand the reality: Disability means unable to perform occupational duties, not absolute and perpetual helplessness. What does the insurer do with this video evidence? In their own words, “[impeach] the claimant, ultimately minimizing the value of his claim.”

Even if your insurer has obtained video surveillance, an experienced disability insurance attorney can place the video in its proper context—not just the five second clip that the insurer wants to show. Surveillance is another reason why it is important to consult with an attorney should you need to file a disability insurance claim.

Credit Ratings of Some Disability Insurers Downgraded

Despite the U.S. not defaulting on its debt obligations, top-rated disability insurers have just had their credit ratings cut—in lockstep with S&P’s downgrade of U.S. sovereign debt. We previously reported that insurers were at risk of a downgrade, as no corporation can hold a higher credit rating than its sovereign. Now reports indicate that New York Life, Northwestern Mutual Life, and other previously AAA-rated corporations have been downgraded to AA+.

This downgrade is not expected to significantly impact the financial operations of insurers. While disability and life insurance companies have large holdings of government bonds, the past week has shown that U.S. bonds have not lost their attractiveness. Accordingly, insurers are expecting only minor financial effects from their downgrades. Perhaps they can now redirect their worries towards their claims management practices, where unfair denials can push insureds into bankruptcy.

Public Briefing Held by U.S. Access Board on Proposed Rights-of-Way Guidelines to Improve Accessibility for Persons with Disabilities

The Access Board recently conducted a public briefing on proposed disabled accessibility guidelines for public rights-of-way.  The proposed guidelines include provisions for pedestrian access routes (including width, grade and cross slope), curb ramps and blended transitions, street crossings, transit stops and shelters, street furniture, and on-street parking.  Also noted were safety and accessibility issues for the disabled, including detectable warnings, accessible pedestrian signals, tabling of intersections, and multi-lane roundabouts.

Among the subjects discussed in the briefing and the subsequent question-and-answer session were concerns about surface roughness in rights-of-way for people who use wheeled mobility aids, visibility of parking meter visual displays for the visually-impaired, pay-by-phone access for the hearing-impaired, the required number of disabled-accessible public parking spaces, accessibility of pedestrian signals at intersections with audible tones for the hearing-impaired and vibrotactile indicators for the blind and visually-impaired, pedestrian-activated signals at roundabouts, and accessibility of color-based warning for the color blind.

The briefing was held on July 26, 2011, with a 120-day comment period and additional public hearings to follow.  More detailed information on the statustics and issues discussed at the briefing is available at the U.S. Access Board’s website, along with links to the full text of the proposed guidelines, an overview of the rule, and reports from research conducted into some of the issues listed above.

How Specific is Your “Own Occupation”?

We have discussed many times the importance of an “own occupation” disability insurance policy. Such policies provide benefits if the insured is unable to perform the substantial and material duties of his own occupation, rather than requiring that the insured be unable to perform any occupation anywhere. But how specific is your own occupation?

John Simon, an environmental trial lawyer with a national practice, became disabled after an automobile accident. Pain in his legs made sitting, standing, and driving difficult. He had hand tremors, and pain medication caused a cognitive decline. He was diagnosed with regional pain syndrome and post-traumatic stress disorder. Yet Prudential Insurance only paid benefits for a year before terminating Simon, claiming that law was a sedentary profession and that there was no proof that he was incapable of performing his “occupation.”

As the District Court found in its decision, Simon “was no ordinary lawyer.” He was able to establish that his national environmental law practice required extensive travel by air and automobile, including carrying heavy files. Simon spent most of his time outside of the office developing a client base, litigating, lecturing on environmental law, and serving on a government commission.

Most of Simon’s practice was originating clients for the firm rather than performing extensive legal work on each case. During his disability period, his bonuses from the firm actually increased—from his fee sharing for bringing in new clients. Thus his bonuses reflected past rather than present efforts. Though the insurer pointed to Simon’s increasing compensation as evidence of his ability to practice law, it failed to investigate the nature of that compensation.

The court found that Prudential failed to consider the functional requirements of Simon’s particular work activities. It held that all of the factors weighed in favor of concluding that Prudential’s termination of benefits was arbitrary and capricious. John Simon had his benefits reinstated.

This case is an excellent example of how important it is to ensure that a disability claim is properly presented to the insurance company. All too often, insurers attempt to misclassify insureds’ occupations as to scope or type of duties. It may be necessary, as it was in this case, to litigate to force the insurer to recognize its obligations under the policy. Thus, if you are filing a disability insurance claim, it is important to consult with an experienced disability insurance attorney.

Read: Not All Legal Work Done Sitting Down, Judge Says in Disability-Benefits Case