Disability Insurer Repeatedly Refuses to Pay for Surgery, Breaks Settlement Agreements, and Postpones Treatment Causing Claimant Anxiety Resulting in $1.5M Verdict

In a recent $1.5M victory against Liberty Mutual Insurance, the Claimant, 54, fractured her left ring finger while working as a mammography technician, and her workers’ compensation insurer covered her claim. The finger had to be surgically repaired and eventually amputated after complications. Because of the disability with her left finger, the Claimant developed epicondylitis-overuse syndrome-in her right elbow. She filed a proceeding before the Industrial Commission to obtain coverage for the elbow injury, but the proceeding was dropped after Liberty stipulated to coverage.

The Claimant subsequently needed surgery on the right elbow, and Liberty attempted to deny its stipulation to accept coverage. It also denied all benefits for the right upper extremity and periodically denied pain treatments for the reflex sympathetic dystrophy (RSD) remaining in her left aim.

The Claimant brought proceedings against the insurer again, and the Commission found that Liberty had to provide coverage because it was supported by the medical merits of plaintiff’s claim. Liberty then refused to pay retroactive disability benefits, and the Claimant stipulated to a reduced amount. Despite that settlement, Liberty refused to pay the stipulated benefits and instead offered a lump sum in exchange for the Claimant giving up future benefits.

As a result of the long delays, the Claimant suffered increased pain for having to postpone surgery and treatment for RSD. She also suffered humiliation and anxiety over the several litigations.

The Claimant sued Liberty, alleging bad faith in making multiple denials of benefits and in encouraging adjusters to minimize disability payments.

Liberty contended that the mishandling of the claim was the result of simple mistakes. It further argued that many insurance companies have restructured their procedures for claim-adjusting efficiency.

The jury awarded plaintiff $1.5 million in compensatory damages. Plaintiff’s claim for punitive damages was dismissed on summary judgment.

Alan Olson writes this web-log to provide helpful information regarding long-term disability cases. He practices long-term disability law throughout the United States from his offices in New Berlin, Wisconsin. Attorney Olson may be contacted at [email protected] with questions about the information posted here or for advice on specific disability benefit claims.

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