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Fears of the Corona Virus have sent global economies and stock markets into a tailspin. Many of those affected have responded by seeking medical testing and treatment. Others are avoiding the spread by “self-isolating.” A third category of individuals is being mandatorily quarantined. The ultimate outcome is, of course, uncertain. Some predict that in a best-case scenario, things may stabilize fairly quickly. Others believe that it will take months or even years before that occurs. Long sabbaticals from work are occurring and people are unsure of how to deal with the financial consequences. To a number of these individuals, disability insurance may provide at least some relief. But how does one qualify for benefits?

The general belief among own occupation, long term disability insureds, is that you have to be totally incapacitated (permanently or temporarily) in order to qualify. That is not correct.  Typically, the test is whether as a result of an injury or illness, you are unable to perform the “substantial and material duties of your own occupation in the usual and customary manner and with reasonable continuity.” Hangarter v. Provident Life & Accident Ins. Co., 373 F.3d 998, 1007 (9th Cir. Cal. 2004); Moore v. Am. United Life Ins. Co., 150 Cal. App. 3d 610 632 (1984); Erreca v. Western States Life Ins. Co., 19 Cal. 2d 388, 396 (Cal. 1942). In short, that means whether you can do what you were doing the way you (personally) were doing it. If you cannot, the first question is, why not? The second question is, what is the exact nature of your impairment? The third question is, how long will the impairment last?

With respect to COVID-19 there are additional issues. For individuals with preexisting conditions, for example, or who have co-morbidity impairments, the question is what is their continuing disability and is it temporary or permanent? For example, an individual with post-traumatic stress disorder, or with issues involving clinical anxiety, depression, obsessive compulsive disorder, prescription drug impairments, or alcohol or substance abuse, they may be permanently disabled from COVID-19, even after the pandemic dissipates. In addition, there may be coverage issues if a government agency, employer, or doctor is mandating that an individual not work when he or she is otherwise relatively healthy, due to the highly infectious nature of COVID-19.

As is so often the case in the law, it is easier to pose questions than it is to come up with answers. Some important questions surrounding COVID-19 and disability insurance are: if you are unable to perform your duties because an illness has shut down your workplace does that constitute a disability? Does it make any difference whether you were directly infected or not? The gateway question, again, is whether you can perform the substantial and material duties of your occupation in the usual and customary manner. And if the answer is no, the next question is whether that is due to a sickness or an injury. This is where the law provides interesting guidance in relatively uncharted territory.

Years ago, our firm represented a football player. Following college, he signed with the Los Angeles Rams. He suffered a neck injury, which “healed,” but his doctors told him that if he were to exacerbate the injury there was a fair chance that he would become paralyzed. Naturally, he declined to continue his football career. When he filed a disability insurance claim, his insurer denied benefits arguing that he was simply “electing” to stop playing football.

The insurance company’s argument was fallacious. It did not matter whether he could run, jump, kick, throw, tackle, or score touchdowns. It did not matter whether he had elected to end his career. All that mattered was that he could suffer devastating consequences if he continued to play football. And it was his decision to make, not his insurance company’s. Likewise, individuals who could suffer serious consequences from working during the COVID-19 pandemic, may be entitled to long term disability benefits.

With regard to COVID-19, the questions posed may not be answered by the judiciary for some time. But if history provides any guidance, it portends a spate of insurance denials that will have to be resolved by the courts.