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Fiduciary Duties

Fiduciary Duties and Your Claim

The Employment Retirement Income Security Act (ERISA) of 1974 covers claims related to most employer-provided health care, pension, severance, and welfare benefit plans. Health and welfare plans typically provide life, disability, accidental death, and dismemberment benefits. In most cases, plan benefits are paid with insurance policy funds. Unfortunately, the majority of insurance companies these days take a business approach to claims and deny valid claims on the basis of cost savings. This is not only unfair but also, it goes against their contractual duties to the insureds.

An adverse claim denial can have a number of adverse implications on a claimant and his or her family members. If you or a family member is currently dealing with the headache that comes with a denied claim, contact Kantor & Kantor to learn more about your rights and how you can exercise them.

Insurers and Employers Have a Fiduciary Duty

Insurers and employers alike have a fiduciary duty to insureds. The courts take this duty very seriously, and if a party breaches it in any way, the courts may force it to pay out the denied benefits and reparations on top of them. So, what is a fiduciary duty?

When one party has a fiduciary duty to another, the first party must act in a way that will benefit the other. Typically, the benefit is monetary in nature, hence the name of the law. The person who owes the duty is called a fiduciary and the person to whom the benefit is owed is called the beneficiary or principal.

A fiduciary’s duties fall into six separate categories, four of which apply directly to the insurer/claimant relationship. Those four categories are as follows:

  • Duty of Care: Per this duty, insurers must consider all material information available to them before making a business decision.
  • Duty of Loyalty: Insurers and employers must act without economic conflict and may not use their position of trust or power to further their own interests.
  • Duty of Good Faith: Insurers and employees must act in a way that does not violate the law.  
  • Duty of Disclosure: Insurers and employers are required to act with complete candor and to ensure both parties have all the facts and circumstances necessary to make a sound decision.

Recognizing and understanding this duty can be helpful in getting insurance companies and employers to pay benefits—whether they be for disability, healthcare costs, life insurance, or retirement—without issue. A claimant’s knowledge of the law can also get deciding parties to seriously consider the clients being presented to them.

What You Can Do When an Insurer Breaches Its Duty

If your employer and/or their insurer wrongfully denied your claim, you may be able to pursue litigation for breach of duty. The courts do not look favorably upon insurers and employers who abuse their positions of power for their own gain. However, you should not attempt to fight the denial on your own. Contact Kantor & Kantor LLP for the guidance and help you need to prevail in your case. We will go over the details and come up with a plan to pursue the benefits you deserve.


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