Legal Question in Insurance Law in California
Employer paid life claim benefit
Employee diagnosed w/terminal cancer 10/16/01, employer thru its ins. broker completed co. med ins. renewal forms & added: employer paid no exclusion life benefit effective 12/01. Employer approved med leave/disability, as of 1/7/02. ins. broker and ins. Co. discovered error- life benefit had not been added at the time of med renewal- and between themselves (ins broker/co.) estab. effective date of 4/1/02. 5/02 employee dies. 7/02 the first time ins. Co. denies claim, employer appealed several times & last denial 5/03 claimed employee was not actively-at-work. The ins. co. refuses to acknowledge the original renewal forms submitted even w/their own policy pertaining to ''clerical errors''. The ins. broker, has/will not, file an E&O claim. Employer intended to provide needed financial relief/help for a long time loyal employee and his family. This small company had suffered the loss of another employee 7/02 for which the insurance company paid benefits. Employers goal is to get the much needed benefits paid to the employees family, the employers original motivation for the added company benefits expense. Can employer presuade/force the insurance company to recognize the 12/01 intended effective date?
2 Answers from Attorneys
Re: Employer paid life claim benefit
Employer may try to persuade, but force? no.
Insurance companies (in my experience) always look to find ways that will avoid payout. Hence, you've got to get a lawyer and enforce your contract. Call your lawyer or call me (323)782-0099.
In addition for breach of contract, you may also have a bad faith case here.
Re: Employer paid life claim benefit
Much depends on the exact language of the benefit plan and the policy. Ask the employer to provide you with the plan, the summary plan description, the application forms and all available correspondence. Then take these to a lawyer.
I am handling a similar case in federal court in San Jose. Generally, these cases wind up in federal court. The defendant is not the employer or the insurance co. but the plan itself.
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