As part of your employment, you may have long term disability benefits (“LTD”). You may even pay a portion of your salary every pay cheque towards LTD benefits. You expect that when you need them, the Insurer responsible for your LTD benefits will help you understand the timelines associated with those benefits. Not in Ontario.
In Canada’s most populous province, the Limitations Act, 2002 imposes a 2-year limitation period for all claims in contract and tort. The discoverability principal, codified by section 5 of the Limitations Act, 2002, governs the commencement of the limitation period. The onus is on you to show that your claim is not statute-barred according to s 5(2) of the Limitations Act. This section presumes that you are aware of the facts giving rise to your claim on the day the act or omission took place, unless the contrary is proved. You must show that you behaved as a reasonable person in similar circumstances using reasonable diligence in discovering the facts related to the wrongdoing.
In the recent Court of Appeal case, Usanovic v. Penncorp Life Insurance Company, which was released on May 18, 2017, the court held that an Insurer does not have to disclose the existence of a limitation period. While an Insurer has a duty of good faith to act promptly and fairly when handling claims by insured, the Court held the duty does not extend to a positive one to disclose information about the policy — namely, the existence of a limitation period.
The court explained as follows: “While I have sympathy for the plea of the appellant, this Court cannot, as acknowledged by the appellant, mandate the ‘ideal’. It cannot order legislative changes. Nor can it mandate that insurers must advise insureds as to policy or statutory limitation provisions.”
The Insurer may deny your LTD benefits and offer you the option to “appeal” indefinitely, but at no time has to inform you that you must take legal steps, usually within 2 years of the first denial. It is important after the first denial to seek counsel immediately so your rights are protected as the insurer will not inform you!