Can You Sue Your Insurance Company for Denying Disability Benefits?

Yes — and it's more common than you think

If your insurance company denied your long-term disability claim in Ontario, you have the legal right to sue them. Filing a lawsuit against your insurer is not unusual, not aggressive, and not something only "extreme" cases warrant. It's a normal legal process that happens thousands of times a year in Ontario.

What suing your insurer actually looks like

A disability lawsuit is filed in the Ontario Superior Court of Justice. Your lawyer drafts a Statement of Claim outlining how the insurer breached your policy. The insurer must respond, disclose their internal claim file, and submit to examinations for discovery. Most cases settle before trial — often at mediation.

What you can recover

A successful lawsuit can recover: all back-pay from the date of denial, ongoing monthly benefits going forward, pre-judgment and post-judgment interest, bad faith damages if the insurer acted unreasonably, and a portion of your legal costs.

Do I need to do the internal appeal first?

No. In Ontario, you are not required to exhaust internal appeals before filing a lawsuit. Many disability lawyers recommend skipping the internal appeal entirely because it rarely succeeds and gives the insurer more time to build their defense against you.

What about the cost?

Disability lawyers in Ontario typically work on contingency — you pay nothing upfront and nothing out of pocket. The lawyer's fee comes as a percentage of the money recovered. If you don't win, you don't pay.

The limitation period

You have approximately two years from the date of denial to file a lawsuit in Ontario. Starting earlier gives your lawyer more time to build a stronger case.