Most purchasing a disability insurance policy may not negotiate specific language. Rather, insurance companies use stock forms, and the negotiation involves the tradeoff between the extent of coverage and the premium. The insurance company supplies the specific statutory provisions once the extent of coverage is determined.
When a dispute arises about specific terms, courts interpreting insurance policies use a time-honored legal principle that construes the language against the drafter. This means that if something in the policy is unclear and susceptible to two or more meanings, the court will favor the interpretation that is most beneficial to the policy holder because the insurance company had the ability to craft the policy in such a manner as to avoid the ambiguity.
Florida Supreme Court Rejects Berkshire Life Insurance Company’s Attempt to Limit Disability Benefits
In Berkshire Life Insurance Company v. Adelberg, the Florida Supreme Court decided when a disability policy fails to define the term “your occupation,” whether the claimant’s “own occupation” is subject to the insurance company’s determination or the claimant’s actual and specific occupation engaged in when the disability occurred. The claimant was employed as a yacht salesman when he injured his knee.
He had an own occupation disability policy with Berkshire Life Insurance Company, which defined “total disability” as the “inability to engage in your occupation, … after the first 120 months, the termtotal disability,’ will have this meaning: your inability to engage in any gainful occupation in which you might reasonably be expected to engage, with due regard for your education, training, experience, and prior economic status.” However, the policy did not define the term “your occupation.” Prior to injury, the claimant had worked as a jeweler, food-commodities salesman, and a yacht salesman. Subsequent to injury, he was employed as a freight-space salesman.
In court, the claimant argued his regular occupation when he was injured was that of a yacht salesman, an occupation which required him to walk and crawl though small spaces to inspect the product. Due to his previous and current employment being in sales, Berkshire Life contended his occupation was that of a general salesman and, because he had subsequently been employed in sales, he wasn’t totally disabled within the meaning of the policy and couldn’t recover disability benefits.
The Court held that Berkshire Life failed to define the term “your occupation,” and in doing so, the policy language would lead a reasonable person to conclude that during the first 120 months “your occupation” means the work in which a person is engaged at the time of disability. Therefore, the Court held, “the term ‘your occupation’ refers to the specific work done by the insured at the time of the injury, not work requiring similar skills and producing a comparable income.”