Lloyd’s Long-Term Disability Denial

Lloyd’s of London offers high-benefit payouts with high premiums. These policies are typically purchased by professional policyholders who work as doctors, lawyers, and business professionals as well as professional athletes. While the rewards are high with Lloyd’s policies, the risks to policyholders are also high. Terms buried in the contract may make it difficult for a policyholder to file a claim against their own policy. That’s where a long-term disability insurance lawyer can help. We can also help you fight a Lloyd’s long-term disability denial.

Lloyd's Long-Term Disability Denial LTD Attorney Robinson & Warncke

How Lloyd’s of London Works

Lloyd’s Is Not a Single Insurance Company

One of the major issues that policyholders have with Lloyd’s of London is that it doesn’t operate as one umbrella company. Instead, Lloyd’s operates as a consortium of subsidiaries that offer individualized disability insurance.

It therefore works as a stock exchange for insurance policies carrying all different kinds of risk. Individual syndicates within the Lloyd’s corporate system can choose to underwrite different policies for a percentage. For instance, if one company chooses to underwrite 75% of a policy, it assumes 75% of the risk but reaps 75% of the premiums as well. In this manner, agents in the exchange can place bets on certain policies.

Since Lloyd’s of London is not a centralized entity but rather comprised of several subsidiaries, policies vary from person to person. And the labyrinthine structure of the organization affords it the ability to give its policyholders the run-around. In some cases, it won’t even necessarily be apparent whom you’re supposed to be suing. This is as true for attorneys as it is for policyholders.

Essentially, you place an order for an insurance policy. The broker puts your policy on the exchange and various syndicates agree to assume some of the risk while collecting your premiums. Typically, multiple syndicates fund a single policy which reduces risk, much like a stock investor diversifying their portfolio. The policyholder is then issued a slip which establishes the terms of the policy. Lloyd’s slip system functions as the policy contract.

Lawsuits Involving Lloyd’s

Lloyd’s, of course, can use their complex structure to their advantage when processing claims against its policies. Since Lloyd’s itself never underwrites insurance, you can’t turn around and file a lawsuit them. This problem led to a class action lawsuit in 2017 which Lloyd’s of London underwriters were sued for antitrust violations and racketeering charges. Lloyd’s settled the case for a reported $22M.

Some of these lawsuits have become quite public. The estate of Michael Jackson was forced to sue Lloyd’s after they neglected to pay $17.5M in disability benefits. Kanye West also sued Lloyd’s for nearly $10M for a similar denial of benefits.

Additionally, individual Lloyd’s syndicates have been in the news for bad faith insurance practices, breach of contract and deceptive business practices. In this case, Lloyd’s denied payment to homeowners even after their homes had been labeled a “total loss”. The biggest problem, attorneys claimed, was that the Lloyd’s syndicate never bothered to conduct any investigation into the damage.

How Do Lloyd’s Policies Differ From Other LTD Policies?

Lloyd’s policies differ from standard long-term disability policies in the following ways:

  • There is usually a wait period of one year or longer;
  • Making a claim on the policy requires a finding of permanent disability; and
  • The payments are made in one lump sum as opposed to periodically.

Because the waiting periods are longer, the insurance company has more time to investigate your claim. Additionally, the terms of the policy require that you are “permanently” disabled. That means no coverage for those who are recovering, and a determination of permanent disability must be established before payments can begin. That is a difficult standard to meet.

Signs Your Lloyd’s Syndicate Is Operating in Bad Faith

While the corporate structure of Lloyd’s may be convoluted and confusing, the ways in which it denies claims unfairly is similar to other traditional insurance companies.

Lloyd’s will ask you for more information regarding your medical status, repeat requests for medical tests from doctors, and claim they never received information that you and your doctor know that you sent them. Once they get the information, they will ask for more information or clarification about the information that they received. If you feel like you’re being give the run-around, you probably are.

After endlessly requesting more information, Lloyd’s may then deny your claim altogether. If Lloyd’s or their syndicates requests information after you’ve already sent it, or for different information that they could have asked you for previously and didn’t, talk to an attorney. The insurance company or its syndicates are required to disclose what information they require in order to reach a decision. They are also required to reach a decision in a reasonable amount of time.

We Can Help With Your Lloyd’s Long-Term Disability Denial

The most common reason for a disability denial is lack of medical evidence. When a claim is filed, the company may stall by requiring more evidence and then finally denying the claim after you’ve provided it. In some cases, Lloyd’s actually denies otherwise valid claims. This buys them more time and then forces the policyholder to litigate the claim.

The first step in the process is going over every line of your long-term disability policy. We need to establish a basic understanding of what they’re looking for. Next, we have to establish that your disability is “permanent” as defined within the policy. We then attempt to meet or exceed the requirements by getting the evidence and medical tests you require to satisfy the terms of the contract.

In some cases, Lloyd’s may deny claims in bad faith. If that’s the case, we can file a bad faith action against them and recover more than your policy is worth.

We can also file an appeal. To learn more about appeals, read our article Should I Handle My Own Appeal?

Contact Robinson & Warncke Today

If your claim has been denied or is tied up in excessive requests for more information, the long-term disability attorneys at Robinson & Warncke can help. Contact us today to learn more about how we can help take some of the stress of dealing with insurance agents off your shoulders.