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 disability 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, disability 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 disability insurance policy. Thus, if you are filing a disability insurance claim, it is important to consult with an experienced disability insurance attorney.