Be Aware of Time Limits for Suing Your Disability Insurer


A recent decision out of British Columbia reminds us all to pay close attention to the limitation period for suing an insurance company for denying disability benefits.

Sander v. Sun Life involved a dispute between Kenneth Sander,  a dentist, and his insurance Company, Sun Life Assurance Company of Canada. In early 1998, Dr. Sander was diagnosed with cataracts in both eyes.  The cataracts interfered with Dr. Sander’s ability to carry on his dentistry practice.  In July 1998, Dr. Sander filed a claim for disability benefits with Sun Life.  Sun Life approved Dr. Sander’s claim and started paying benefits to him.  in September 2000, Sun Life wrote to Dr. Sander to tell him that Sun Life expected him to undergo surgery to correct cataracts.  If he did not, Sun Life said that it would extend benefit payments for the time that Dr. Sander would have been expected to be disabled if he had proceeded with the surgery, and then it would close his claims file.  In February 2001, a judge decided that Dr. Sander’s refusal to undergo cataract surgery was unreasonable under the terms of the policy.  In June 2001, Sun Life wrote to Dr. Sander to advise that Sun Life was terminating Dr. Sander’s disability benefits.

Dr. Sandor underwent corrective surgery to his right eye in February 2003 and to his left eye in December 2003.  Despite those surgeries, he claimed that he still did not have the visual acuity to practice dentistry.  Dr. Sander started his lawsuit against Sun life on November 9, 2004 for a declaration that he was entitled to disability benefits under the insurance policy.  Sun Life argued that the one-year limitation period to start a lawsuit had expired before Dr. Sander started his claim on November 9, 2004.

The court stated that the determinative question was whether Dr. Sander was clearly put on notice by the letter of June 29, 2001 the limitation period to commence a lawsuit had began to run.   This required the notice to the clear and unambiguous.  The Court held that the letter did constitute clear and unambiguous notice of termination, and nothing that Sun Life did afterward detracted from or lessened the clarity of that June 29 2001 letter.  As a result, the court held that Dr. Sander’s action was statute barred and it dismissed his action.

The decision in Sander is a reminder to plaintiffs and their lawyers to take care to ensure that they are aware of the relevant limitation periods at the face when dealing with their insurance companies, and to ensure that they understand clearly when those limitation periods began to run.


Patrick Brown


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