Gregory Dell and Stephen Jessup explain the legal landscape for long-term disability insurance claims in Florida, covering both ERISA-governed group policies and private individual policies. For ERISA claims — which make up roughly 90% of cases — Florida falls within the 11th Federal Circuit, where courts apply an “arbitrary and capricious” standard of review. This means insurance companies are generally granted discretion to make claim decisions, and a judge ruling on a denied claim must first determine whether the claimant is disabled and then separately decide whether the insurer acted unreasonably in denying benefits. The attorneys stress that this two-step analysis shapes everything from how applications are filed to how appeals are crafted, since the goal is not just to prove disability but to build a record showing the insurer’s conduct was unreasonable.

Jessup explains that discretionary clauses — typically buried in the back of policies — give insurers significant power, and Florida courts have interpreted even vague policy language as establishing discretion, unlike some other circuits that require explicit language. This makes jurisdiction selection critical; because federal lawsuits can potentially be filed in multiple courts, the attorneys evaluate every case to determine the most favorable venue. They also note complications around choice of law, where a claimant in one state may have a policy governed by another state’s laws, leading to complex legal arguments about which rules apply.

For private or individual disability policies not governed by ERISA, Florida law treats denials as breach of contract cases. However, recent 2023 legislative changes have made the landscape significantly less favorable for claimants by raising the threshold for bad faith claims to near gross recklessness and potentially eliminating first-party attorney’s fee awards. The attorneys warn that this will make it harder for policyholders to find legal representation, since many lawyers previously took these cases based on the expectation of court-awarded fees.