When you are dealing with a serious illness or disability, paperwork is often the last thing on your mind.
But what happens if you never formally submitted a long-term disability (LTD) application — and your insurer later argues that you are not entitled to benefits because you “failed to apply”?
In Ontario, the courts have confirmed that missing a procedural step does not automatically prevent an employee from pursuing LTD benefits.
The Legal Issue: Is a Formal LTD Application Always Required?
Many group disability policies require an employee to:
- Submit a formal LTD application;
- Provide medical documentation; and
- Follow internal appeal steps before starting a lawsuit.
Insurers often rely on these technical requirements to deny claims.
If your claim has already been denied, you may wish to review: Long Term Disability Denied – Know Your Rights.
The Decision: S. v. Sun Life Assurance Company of Canada
In S. v. Sun Life Assurance Company of Canada, 2021 ONSC 7109 (CanLII), the Ontario Superior Court considered whether an employee could pursue LTD benefits despite never submitting a formal LTD application.
In that case:
- The employee applied for Short-Term Disability (STD);
- He submitted extensive medical documentation;
- The insurer was aware of his disability;
- The STD claim was denied; and
- He commenced litigation seeking LTD benefits.
The insurer argued that because no formal LTD application was submitted, the employee was barred from pursuing benefits.
The Court disagreed and allowed the employee to continue his claim.
Relief from Forfeiture: What It Means
The Court relied on the principle of relief from forfeiture.
This equitable remedy allows a court to overlook technical non-compliance with a contract if strict enforcement would be unfair in the circumstances.
When deciding whether to grant relief, courts assess:
- The conduct of the insured;
- The seriousness of the breach; and
- The balance of harm between the employee and the insurer.
The Court found that the insurer had clear notice of the disability through the STD claim and supporting documentation. The failure to submit a formal LTD application amounted to “imperfect compliance,” not bad faith. Preventing the employee from proceeding would have caused significant harm.
As a result, the employee was permitted to continue his LTD lawsuit.
What This Means for Employees in Ontario
This decision may be helpful if you:
- Missed a deadline in the LTD process;
- Did not formally submit an LTD application;
- Were told you must complete internal appeals before suing; or
- Believe the insurer relied on a technicality to deny benefits.
You may still have legal options.
If you are unsure whether your claim was properly started, see: Starting a Long-Term Disability (LTD) Claim in Ontario.
If your benefits were denied, you may also wish to review: Appealing Long Term Disability.
Do You Always Have to Exhaust Internal Appeals?
Not necessarily. While many policies include internal appeal processes, courts do not always require employees to complete them before starting legal proceedings. Each situation depends on the policy wording and the specific facts.
Speak With a Toronto Long-Term Disability Lawyer
If you did not submit a formal LTD application, missed a deadline, or were told you cannot proceed because of a procedural issue, you should obtain legal advice promptly.
Learn more here: Long Term Disability Lawyer in Toronto
Monkhouse Law represents employees across Ontario in long-term disability disputes, including litigation against insurers. Contact us for a free 30 minute phone consultation.