In the case of Berkshire Life Insurance Company (“Berkshire”) v. Bruce Adelberg, the Florida Supreme Court held that the term “your occupation” refers to the work in which the insured is engaged when the disability occurs.
Mr. Bruce Adelberg and his Berkshire Disability Insurance Policy
Berkshire insured Mr. Adelberg under an individual disability policy that stated, in part, “total disability means your inability to engage in your occupation.” Berkshire’s policy, however, did not define the term “your occupation.”
While insured, Mr. Adelberg worked at various times as a jeweler, a food-commodities salesman, a yacht salesman, and a freight space salesman. In February 1990, while working as a yacht salesman, Mr. Adelberg injured his knee. Berkshire determined Mr. Adelberg was totally disabled as to his occupation and began paying him benefits.
Mr. Adelberg returned to work as a yacht salesman a few months later, and Berkshire terminated his benefits. Almost immediately, Mr. Adelberg’s knees swelled to the point where he could no longer walk. He notified Berkshire that his knee injury returned, indicating he was still totally disabled.
Although Mr. Adelberg then found employment as a freight space salesman, he maintained his disability claim with Berkshire because of his inability to perform the duties of a yacht salesman. Berkshire denied Mr. Adelberg’s claim on the basis that he was not totally disabled from his occupation as a salesman, forcing him to pursue litigation to obtain his benefits.
Mr. Adelberg filed a complaint in Miami-Dade County Circuit (State) Court after his claim was denied, and Berkshire had the case moved to federal court. After the judge agreed that Mr. Adelberg’s occupation was a yacht salesman and a jury awarded him over $200,000, Berkshire appealed and argued that if “your occupation” is undefined in a disability policy, the term should not be limited to the particular job held by the insured at the time of the injury. Rather, Berkshire further argued, “your occupation” should apply to any similar position of the same general character.
The Eleventh Circuit Court of Appeal found that the case presented an issue of Florida law that should be resolved by the Florida Supreme Court. In response to Berkshire’s position that the court should hold that Mr. Adelberg was a salesman rather than a yacht salesman under the terms of the policy, the court emphasized that:
“It has long been a tenet of Florida insurance law that an insurer, as the writer of an insurance policy, is bound by the language of the policy, which is to be construed liberally in favor of the insured and strictly against the insurer.”
The court also found that if Berkshire intended for “your occupation” to mean any sales position rather than the specific type of sales position Mr. Adelberg held at the time he became disabled, it “should have so stated in unambiguous language.”
The Court’s Decision
In holding that “your occupation” refers to the specific work done by the insured at the time of disability, not to work requiring similar skills and producing a comparable income, the court explained that:
- Mr. Adelberg was entitled to a clear explanation of terms rather than a fine distinction which was never written into his contract for disability insurance coverage;
- Since Berkshire wrote the policy, it had the duty to write a clear definition if they wanted to limit benefits; and
- Berkshire’s failure to limit the term “occupation” with any qualifying word other than “your” in the policy must be interpreted in favor of coverage for Mr. Adelberg.
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