What are some potential damages from a wrongful denial?
If the policy is an individual, non ERISA policy, then the Insured may be entitled to damages for breach of contract. This would include the amount of unpaid benefits due under the contract. Future benefits cannot be awarded, as they are evaluated and paid on a monthly basis. Additionally, the Insured may be entitled to interest on contractual damages. In cases where the action is based on the breach of implied covenant of good faith and fair dealing (“bad faith”) the insured may be entitled to recover punitive damages. Under both private and ERISA policies, the insured may be entitled to all or part of the attorney’s fees incurred in appealing a wrongful denial.
