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ICBC & other disability benefits.

• Do I have any recourse if my employer's disability insurer cuts off my benefits? Do the same rules apply if ICBC cuts off my disability or rehabilitation benefits?
• You may have recourse. After years of being easy on disability insurers, the courts have finally become somewhat tougher on them. As a result, insurers are now more nervous about terminating disability benefits.

  ICBC is your own insurer for ICBC disability, homemaker and rehabilitation benefits. The principles set out below apply equally to ICBC and to your disability insurer:

  • You may have claims for aggravated and punitive damages in addition to a claim for the reinstatement of your benefits.
  • Aggravated damages are available if the insured establishes that a breach of a contract by an insurer caused him or her mental distress.

  The B. C. Court of Appeal wrote the following in support of its award of $100,000 in punitive damages in a 2004 decision called Fidler v. Sun Life Assurance Co. of Canada.

  "Having concluded that Sun Life breached the duty of utmost good faith it owed to Ms. Fidler, I am persuaded that its breach is such a marked departure from ordinary standards of decent behaviour as to be deserving of punishment in the form of punitive damages…".

  In my view, punitive damages are required in this case to denounce Sun Life's conduct and to deter it and other insurers from engaging in this type of conduct in the future. "

  ". . . the aggravated damages of $20,000 awarded in this case are insufficient to mark the court's disapprobation of Sun Life's conduct. The insurer's refusal to pay benefits to a vulnerable insured for over five years resulted in more than $50,000 in benefits (and pre-judgment interest) having been withheld. In my view, a rationally proportionate penalty in these circumstances is the sum of $100,000. I would award punitive damages in that amount. "