Long Term Disability and its Interplay Between Accident Benefits/Tort Claims and WSIB
In Ontario, individuals have access to several types of disability coverage, each one interplaying with the other. The focus of this blog is mainly for those injured in motor vehicle accidents. If you have suffered injuries as a result of, or have been involved in a motor vehicle accident, you will likely have access to short term disability claims followed by long term disability benefits (“LTD”) and tort/accident benefits claims. If the accident occurred in the course of employment, then there is also the likelihood that the injured person would have access to Workplace Safety and Insurance (“WSIB”) benefits. The interplay between each of these benefits is complexed and can often be tricky.
A fundamental goal of the tort law system is to ensure that an injured person is compensated for their losses. In a sense, the injured person is restored to the position they would have been in if not for the accident, but no more. Double recovery is not generally permitted. As such, an injured person must be careful in selecting any applicable/eligible benefits as deductions and offsets between benefits is inevitable.
Notably, LTD policies are contracts. In LTD contract law, the benefit from other available benefits will depend on the language and wording in the policies. Most group LTD policies include language and wording that may limit the receipt of disability benefits from another source.
In Ontario, if an injured victim has LTD benefits, LTD becomes the first payor and must be exhausted before accident benefits/tort claims are payable. However, if the injured person has access to WSIB and elects to forgo WSIB to pursue a tort claim, then the injured person’s LTD could be considered a second payor. What this means is that the LTD insurer is permitted to “off-set” any WISB benefits the injured person is “eligible” for. This could potentially lead to a situation where the LTD carrier can deduct an amount of WSIB the injured person could have received if they opted to receive it.
The extent of the off-set and the type will be couched in the language and wording in the LTD policy. Courts are giving increased attention to the LTD policy wordings and its intentions. In a deductibility situation where an injured person has opted to pursue a tort action against the at-fault driver, thereby electing out of WSIB, such an injured person may only have accident benefits and Tort to claim income loss and other benefits from.
In this often complex and tricky world of LTD, accident benefits/tort, and WSIB, it is important that injured parties are aware of the consequences of their selections. It becomes especially important therefore to carefully review the wordings/language of your LTD contract.
Sources:
Wilken v Sun Life Assurance Company, 2017 ONCA 975
