This disability insurance case hinged on whether the insured could no longer perform his job because of a “factual disability” or a “legal disability”. The factual disability was a substance abuse problem, and the legal disability was the loss of an occupational license. The policy only covered factual disabilities, and the insurer had denied benefits finding employment ended for a legal disability. The court determined that the loss arose from the insured’s legal disability, and thus no coverage was due.
As to the bad faith claim accompanying the breach of contract action, the court noted: “Because [the insurer] properly terminated benefits, it cannot be liable for bad faith.”
Date of Decision: October 15, 2018
Rothman v. Unum Group, U.S. District Court Eastern District of Pennsylvania CIVIL ACTION NO. 18-1299, 2018 U.S. Dist. LEXIS 176525, 2018 WL 4961609 (E.D. Pa. Oct. 15, 2018) (Savage, J.)