Having Multiple Long-Term Disability Insurance Policies Doesn’t Necessarily Mean You Can Achieve Different Results Under the Different Policies

Doctors, Dentists, and Lawyers in Chicago frequently have more than one long-term disability insurance policy: a group policy offered through the firm or practice, and an individual supplemental policy. By having coverage with two different insurers, you can hedge risk that if one denies a claim, you may have the other approved and thus not all your disability income tied up in one claim decision. But you may not hedge that risk by taking out both policies with the same insurer, which will often approve or deny all claims consistently. But can you potentially reach different outcomes in litigation if you litigate two denials by the same insurer under two different policies? A civil procedure concept known as Issue Preclusion may prevent you from even getting a trial on the second policy.

In Allen v. First Unum Life Insurance Co., No. 2:18-cv-69, 2023 WL 1781509 (M.D. Fla. Feb. 6, 2023), Dr. Allen had coverage from Unum under both a group long-term disability policy and an individual long-term disability policy. Unum approved his claims under both policies because he had impaired vision, and he worked as a radiologist. Some years later, Unum terminated both policies’ benefits, contending Dr. Allen’s condition had improved sufficiently to allow him to resume work as a radiologist. Dr. Allen sued Unum for breach of the individual long-term disability insurance contract, and sued for benefits under the group policy under ERISA § 502(a).

The district court held a jury trial for the individual disability insurance policy claim. The jury returned a verdict in favor of Unum. Dr. Allen then sought to proceed to trial on his group disability insurance claim. Unum contended Issue Preclusion applied, preventing any trial on the group long-term disability insurance claim because a jury already decided whether Dr. Allen was disabled from performing the material and substantial duties of his own occupation as a radiologist. The district court agreed with Unum and entered judgment on its behalf under both policies because any trial on the group long-term disability insurance claim would necessarily reach a contrary result to the same issue already decided by a jury.

If you have multiple long-term disability insurance policies, and need to make a claim, talk to a skilled long-term disability insurance attorney to avoid any pitfalls and give yourself the best chance of success.