Disability Insurance: A Look at Ambiguous Exclusion Clauses

Apr 30, 2018 | Blog |

As a general rule, insurers do everything possible to minimize their liabilities.  In the disability insurance context, this may involve the denial of an otherwise legitimate benefits claim on the basis of an exclusion written into the insurance policy.

Exclusions are often written in a particularly ambiguous way, however, so as to encourage prospective policyholders to enter the insurance agreement — the policyholder may interpret the exclusion in a broad and more favorable manner, when the insurer actually intends to interpret the exclusion more strictly.  Once you have become disabled, the insurer’s interpretation of the exclusion may come as something of a surprise.

In the event that your insurer has denied your legitimate disability insurance claim, and their reasoning is based on a unfavorable reading of an ambiguous exclusion clause in the insurance contract, Illinois law may support your argument for benefits.

Illinois — same as other states — applies the strict insurance ambiguity rule.  Let’s take a look at how it works.

Application of the Strict Insurance Ambiguity Rule

In Illinois, and elsewhere, the strict insurance ambiguity rule (more formally known as the contra proferentem rule) requires that any ambiguities in an insurance policy — including ambiguities in exclusion clauses — be strictly interpreted in favor of the policyholder, and against the interests of the insurer.

For example, suppose that you are a disability insurance policyholder, and your policy has an exclusion clause that disqualifies movement-based disabilities.  Later, you suffer a disabling illness where — among many other symptoms — one of the symptoms includes erratic movements.  These erratic movements have a significant effect on your ability, too.  You submit a disability benefits claim, and the insurer denies your claim on the basis of the exclusion.

The exclusion itself is ambiguous, however, and it could be reasonably interpreted to exclude only those disabling conditions where the primary symptom is a mobility issue, such as Parkinson’s Disease.  The exclusion — as interpreted by the insurer — is so broad that it would include any illness or injury that had even minor effects on one’s mobility.

Given this ambiguity, the court will likely interpret the provision in a way that is favorable to your interests as the policyholder.  In other words, you would be entitled to benefits despite the initial denial.

In some cases, the language of the exclusion clause is not obviously “ambiguous.”  When that happens, the court will allow each party to introduce outside evidence that helps clarify the ambiguity issue.

Contact Our Team of Skilled Chicago Disability Lawyers for Further Assistance

If you have had your disability insurance claim wrongfully denied on the basis of an ambiguous exclusion clause (that was interpreted in a way unfavorable to your interests as the disability policyholder), then you have the right to appeal the denial, or — in some cases — even bring an action against the insurer for wrongful denial.

Here at Bryant Legal Group, PC, we have decades of combined experience representing insured clients in a range of disputes with their insurers, including those that involve disability insurance claims that turn on ambiguous exclusion clauses.  We believe that effective representation means thorough representation, and to that end, we conduct a full assessment of the medical records at-issue while keeping in mind the ambiguity that inheres in the insurance contract.  Our step-by-step, comprehensive approach to insurance litigation has paid dividends for our clients, and we have a long track record of successful verdicts and settlements to prove it.

Call (312) 561-3010 to speak with the experienced Chicago disability lawyers here at Bryant Legal Group, PC.  We look forward to assisting you with your insurance dispute and helping secure the benefits to which you’re entitled.

Bryant Legal Group - Chicago Healthcare and Disability Attorneys


"Mr Bryant, his partner Jennifer Danish and associate Steve Jackson were efficient, diligent and persistent towards finding a just resolution and favorable outcome for myself and my entire company."

"I used Jennifer Danish for a disability claim. Frustrated that I couldn’t get results myself I found her. She unearthed some issues my doctor did Not notify me of that affect the quality of my life. My end result was positive!"

"Mr. Jackson did an outstanding job in relation to my case. He insured I was. Both prepared as well as informed regarding the hearing. I would highly recommend his skills and personal dedication to the client."

"Though difficult for the obvious reasons, your involvement has made this process infinitely more tolerable. Please know of my sincere appreciation for your efforts. With Very Best Regards,"

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