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How Regular Occupation will be determined?

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wilson7

Member
I have a personal disability income policy for a long time. It contains the following language:

Regular Occupation: the occupation or occupations in which you are regularly engaged at the time you become disabled.

Total disability means: you are unable to perform the material and substantial duties of your Regular Occupation and receive Regular Medical Care

I have been working for the last several years for an employer therefore my occupation is well defined. Now I want to resign that job and start my own consulting company (I will be the only employee/owner of that company).
I wish to register that company, as an LLC or sole proprietorship, with the Division of corporations of Florida. https://dos.myflorida.com/sunbiz/. My questions are

(i). Once I register, will it be enough to prove that I am regularly engaged in an occupation?

(ii). How the material and substantial duties of my occupation will be defined in case there is a disability claim? Will the Purpose or Statements information that I provide with the Division of corporations of Florida, when I register my company, be enough?

(iii). How much time will be considered as “regularly engaged” in my new occupation (i.e., consulting company work)? What if I start this consulting company today and I am disabled tomorrow due to an accident? Will it be treated as if I am regularly engaged when I am disabled (if not, how many dyas or months should be passed)?

A related question is: is it possible to have a regular occupation without registering a company with the Division of corporations of Florida?

I wish I never get disabled but, at the same time, I should be covered by my disability insurance policy in case I am disabled once I start my company.
 
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PayrollHRGuy

Senior Member
"Regular Occupation: the occupation or occupations in which you are regularly engaged at the time you become disabled."
 

wilson7

Member
Thank you. but still I am confused on what if I start my own business and become disabled due to accident, after a week? what will be treated as "regularly engaged"? Hypothetically, if I start my own business today and end up with an accident after a week and became disabled then will my policy covers (of course, if I am under Regular Medical Care)?
 

adjusterjack

Senior Member
Let me give this a try.

(i). Once I register, will it be enough to prove that I am regularly engaged in an occupation?
Enough, no. An element, yes. Being engaged in an occupation means you are doing the things that the occupation entails. Registration may help establish a date that the new occupation started but it's what you do that counts. Example: You quit your job as a forklift operator and register your LLC as an accountant. Business is slow so you convince your boss to let you go back to work as a forklift operator. On the way home you are in an auto accident and your legs are mangled. Your regular occupation is forklift operator from the point of view of the disability policy.

(ii). How the material and substantial duties of my occupation will be defined in case there is a disability claim? Will the Purpose or Statements information that I provide with the Division of corporations of Florida, when I register my company, be enough?
Again, what you do defines your regular occupation, not what's on any particular piece of paper though, as I noted, the registration could be one factor.

(iii). How much time will be considered as “regularly engaged” in my new occupation (i.e., consulting company work)? What if I start this consulting company today and I am disabled tomorrow due to an accident? Will it be treated as if I am regularly engaged when I am disabled (if not, how many dyas or months should be passed)?
The work you were doing prior to, and on, the day you stopped working because you became disabled is your regular occupation.

is it possible to have a regular occupation without registering a company with the Division of corporations of Florida?
Yes.

Understand that I've given you some rather finite examples but there could be variables (like with anything else in life) that could complicate matters. Speculating on them would not be useful.

One more thing. Once you do change your regular occupation, notify your disability insurance company. That notification is also an important element in determining when the new occupation became your regular occupation.
 

wilson7

Member
Thank you and appreciate. As you provided in your example, if I stopped working as forklift operator and registered my LLC as an accountant (I am the only person for everything/role) and then solved some account issues with one or more clients over the time (at least 1 or 2 weeks) and received payments from that clients (and deposited that money in my business account) and then disabled due to an accident then will it be enough to prove that I am regularly engaged in the accounting occupation?

Is it a good idea to keep the documents related to communications and payments between me and the clients (who had accounting issues) to establish proof for my regular occupation?

I am happy to inform my disability insurance company once I started my new LLC but I wish to let you know that there is no such provision in the policy: still, will it be a good idea to inform the company once I moved to my own LLC business?

My goal is to make sure that the disability insurance company SHOULD not say that I am not regularly engaged in ANY occupation (in that case I will not get any disability benefits) (and of course, my ultimate wish is to never get disabled!)
 

ALawyer

Senior Member
Adjuster Jack gave you some good advice. The determination would be made in the first instance by the insurance company considering all the facts and circumstances, and if it denied the claim you'd have to take it to court, assuming yours is an individual policy, and then the jury or judge would look at all the facts and circumstances. Having a legal entity that employed you might be one indicia but that would not be dispositive, especially when you own and control the entity. However, if you shortly after embarking on what you considered a new occupation you were to claim that your disability precludes you from engaging in that new occupation, even though you would have been able to engage in your prior occupation an insurer, a judge and a juror might look at your claim with great suspicion. For example, if I as a lawyer decided to change occupations and become an acrobat or tight-rope walker -- even though I set up an acrobatics company and printed business cards -- were I to be injured the first month after my transition to acrobat (as I undoubtedly would be -- most likely in the first half hour) I doubt that any insurance company would readily pay my claim, Further, I expect that if I then took the matter to court, the judge and jurors would not be very sympathetic to my suit.

Also, I suggest that you carefully read your disability policy as there are very few "own occupation" policies extant, and most of the policies one can buy provide for payment (initially or after a short period) only if the claimed disability means that the policyholder can't work in any occupation for which he or she is qualified to engage in by reason of his education, experience or training.
 

wilson7

Member
Thank you and i very much appreciate. In fact, I am planning to start an LLC which is intended to do similar work I have been doing now for another company as an employee but my LLC company job involves some travel (as I need to personally meet the clients also)

I bought "Regular Occupation" (i think you are calling it as "own occupation" ) rider for extra premium when I purchased this policy.
 

adjusterjack

Senior Member
Thank you and appreciate. As you provided in your example, if I stopped working as forklift operator and registered my LLC as an accountant (I am the only person for everything/role) and then solved some account issues with one or more clients over the time (at least 1 or 2 weeks) and received payments from that clients (and deposited that money in my business account) and then disabled due to an accident then will it be enough to prove that I am regularly engaged in the accounting occupation?
Probably. Again, speculation is useless.

Is it a good idea to keep the documents related to communications and payments between me and the clients (who had accounting issues) to establish proof for my regular occupation?
Of course it is. Keeping appropriate records is common sense for any business.

I am happy to inform my disability insurance company once I started my new LLC but I wish to let you know that there is no such provision in the policy: still, will it be a good idea to inform the company once I moved to my own LLC business?
You're right, it's not required and won't make any difference if you do or don't. I only suggested it as a method documenting any change in your occupation. But since you have revealed that your new occupation will be similar to your old occupation, it's moot.

My goal is to make sure that the disability insurance company SHOULD not say that I am not regularly engaged in ANY occupation (in that case I will not get any disability benefits) (and of course, my ultimate wish is to never get disabled!)
That doesn't happen. Even if you were unemployed when you became disabled, your benefits would be based on your occupation from before you were unemployed.

I bought "Regular Occupation" (i think you are calling it as "own occupation" ) rider for extra premium when I purchased this policy.
Smart move. You pay extra to be able to collect disability benefits will earning income for an unrelated occupation.
 

wilson7

Member
Thank you and once again appreciate.

From an article, I read some case laws provided below, which may shed some light on “own occupation” and “Regular Occupation”. In light of these case laws, if I am disabled on my travel in my new LLC company job, will I be covered? Although my proposed (new) LLC job is similar to my current job, it (LLC job) involves significant travel as I need to meet the clients in different parts of US and may involve occasional travel to other countries as well (my current job does not involve any travel). So, once I started my LLC job, if I am injured/sick during travel, I wish to make sure I am covered under my policy without which my entire family will be in trouble. How to properly establish my Regular Occupation (i.e., the occupation or occupations in which you are regularly engaged at the time you become disabled) as per the definition provided in my policy, once I registered my LLC and started doing work for my LLC? My disability insurance policy is issued in Florida.


Whether insurers’ “own occupation” analyses properly considered the definitions of “occupation” or “job” under the relevant plan language— which are often defined as the position the insured held when disability was claimed—was also explored this year. In Anderson v. Sun Life Assurance Co. of Canada, 2013 WL 6076547 (D. Ariz. Nov. 19, 2013) the claimant worked as a registered nurse for approximately fifteen years. She then became a patient satisfaction representative (PSR) after she suffered a work-related injury. The plan defined “own occupation” as the work the employee performed “immediately prior to the first date Total or Partial Disability began.” After a year as a PSR, the claimant stopped working and submitted a claim for LTD benefits. The insurer denied the claim because her injury did not affect her work as a PSR. The claimant argued her “own occupation” “should be the material duties of her long held position” as a registered nurse and not her recent position as a PSR. The court disagreed and granted summary judgment for the insurer, finding it was bound by the policy’s definition of “occupation.”


The Eighth Circuit examined whether the timing of a claimant’s disability in relation to his loss of licensure impacted his right to benefits in Cich v. National Life Insurance Co. 748 F.3d 807 (8th Cir. 2014). There, the plaintiff sued for disability benefits after becoming disabled one year after the State of Minnesota suspended his professional chiropractic license. At issue was whether the plaintiff had to be actively engaged as a chiropractor at the time his disability accrued to be eligible for policy benefits at any time thereafter. The Eighth Circuit upheld the district court’s decision that benefits were not payable because, due to the loss of his professional license, the claimant was not performing the duties of his regular occupation when he became disabled.
 
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adjusterjack

Senior Member
It's time to stop with the "what ifs."

You have a policy. You've apparently read it. Rely on its terms and conditions. If something happens you file a claim and go from there.

I can't predict the future (wish I could) so I really can't be of any more help here.
 

xylene

Senior Member
I'm not sure why the OP can't simply contact the insurance company and ask them.
perhaps out of a belief that asking a lot of pointed questions about maxxing very early claims gets you flagged for super-duper underwriting.
 

wilson7

Member
Thanks again and appreciate.

I clearly understood that we cannot predict what the insurance company will do if a claim is filed, and I agree with adjusterjack.

Zigner, do you think the insurance company will provide answers for questions now (i.e., without me even changing my job)? If I ask them and later on if I file a claim (if I am disabled) then they may argue that I “planned” this disability!?
 

Zigner

Senior Member, Non-Attorney
If your new line of work is substantially the same as your current line of work, then why does it matter?
 

wilson7

Member
As I already explained Zigner, that my new job involves travel too, and it seems you overlooked it.

By the way, I saw case law https://caselaw.findlaw.com/fl-district-court-of-appeal/1112090.html which essentially says that even if I am not employed after resigning from my current job but disabled during that unemployed time, I will be covered by the policy (please correct me if I wrongly interpreted the Florida law) and the definition of “occupation” in that case law is “regularly engaged at the time disability begins.” , which is essentially meaning the same as mine (except for wording).
 

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