The Deadline to Sue on an LTD Denial

The deadline to sue on a disability denial is the one thing in the file that cannot be fixed later. Miss it and the claim ends on a preliminary motion, whatever the medical evidence would have shown. Insurers plead limitation defences as a matter of course, so the date has to be identified in the first week, before anything else on the file is decided.

When the Clock Starts

The clock generally starts when the claim is discoverable, which for a disability claim is normally the first clear and unequivocal refusal to pay. A letter that asks for more information is not that refusal. A letter that says benefits are terminated effective a stated date usually is. Where an insurer keeps the file open and keeps requesting material, the start date becomes arguable, and no one should plan around an arguable date.

The Deadline to Sue in Each Atlantic Province

New Brunswick and Nova Scotia each run a general two-year limitation period from discovery, with an ultimate limitation period measured from the act itself. The period for an action on the policy itself depends on how the policy is classified and on the province’s Insurance Act. In New Brunswick, Nova Scotia and Prince Edward Island, an action for insurance money can be barred one year after the proof of claim is furnished, or six years after the event, whichever comes first. In Newfoundland and Labrador the general six-year period applies to a group policy, and a non-group policy can carry a one-year condition.

Which province’s law governs is a separate question from where you live, because a group policy may be issued and administered elsewhere. The local rule is explained for New Brunswick, Nova Scotia, PEI long-term disability claims and Newfoundland and Labrador.

What an Appeal, a Payment or a Promise Does to the Clock

An internal appeal does not pause anything, which is the trap set out in the internal appeal chapter. A payment made after a denial can restart the clock in some circumstances, and so can a written acknowledgement of liability by the insurer, but both depend on statutory wording that differs across the four provinces. A verbal assurance from an adjuster that the file is still under review does neither.

What Happens When the Deadline Passes

The insurer moves to dismiss and the court decides the date on the documents. Arguments about discoverability are available, and a claimant under a disability or a minor may have the period suspended, but these are exceptions argued after the fact and are not a plan. Nova Scotia claims are heard in the Supreme Court of Nova Scotia, whose practice materials are published by the Nova Scotia courts; New Brunswick claims go to the Court of King’s Bench, published by the New Brunswick courts. The limitations statutes themselves are on CanLII.

What the Lawsuit Then Claims

The deadline preserves the claim and does not define it. What the action recovers, from arrears through to damages for the manner of the denial, is set out in what an LTD lawsuit claims. The firm diarises the limitation date on the first call, described on the long-term disability lawyer page, and you can bring the denial letter to a contact appointment.