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Can you sue your disability insurance company for bad faith?When your long-term disability benefits are denied or terminated, this can cause severe financial hardship for you. In addition to having your benefit check not arrive each month, you are going to have to find an experienced long-term disability attorney to appeal the denial or file suit.

That attorney will cost money.

You will almost certainly suffer emotional distress over the loss of expected benefits.

What about a "bad faith" case against the insurance company? Can you file one?

If the policy is governed by ERISA, (most employer-sponsored policies are), then there is no chance of recovering anything other than what the insurance company already owes you. You may also be able to recover attorney fees, but that is discretionary with the judge.

So the answer is "no," you cannot recover "bad faith" damages in Virginia for a denial of long-term disability benefits that are governed by ERISA.

If the policy is an individual policy or a group policy not governed by ERISA, you can sue for "bad faith" in Virginia.

The bad news is that if you win, the only damages recoverable are your attorney fees; plus, it is a very high bar that you must reach to recover bad faith damages.

The bottom line is that the disability insurance companies have a huge economic advantage over you in these cases. They know that on their worst day the most they usually face in court is having to pay you what they owed you in the first place.

(Fun fact: Complaining to Congress won't help much. They exempted themselves from ERISA.)

Ben Glass
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Ben Glass is a nationally recognized ERISA disability & life insurance attorney in Fairfax, VA.