National Post column: You are being watched: Insurers are ramping up surveillance to stamp out disability benefits fraud

Howard Levitt: Disability claims are on the rise and insurers are suspicious and on guard.

Was a blue sedan tailing you earlier? It looks like the same car that was parked three doors from your home for the past few days. Could it be that the man clad in dark clothes and sunglasses really has a similar shopping list to yours? He was at the deli counter and followed you through the produce department to the bakery. There he is again standing two socially-distanced floor stickers behind you in the check-out line.

Coincidence? That depends. Have you applied for long-term disability benefits, or are you currently receiving long-term disability benefits from an insurance company? If so, your instincts are probably accurate. You are being watched.

Disability claims are on the rise and insurers are suspicious and on guard. Most short-term disability polices provide for four to six months of benefits before an employee needs to apply for long-term disability benefits under a separate insurance policy.

With the onset of COVID-19 in March, we are now at that four- to six-month mark for claims made at the start of the pandemic and insurers are trying to quell the onslaught. Insurers, like all businesses, are profit based.  If they approve too many claims, they lose money. Apart from the common reasons to deny a disability claim (such as insufficient medical evidence or a failure to follow treatment plans), insurers are increasingly relying upon surveillance.

Insurers hire professional private investigation firms to conduct surveillance as a means to deny or discontinue disability benefits.

They usually spend between $5,000 to $10,000 which yield anywhere from half a week to a week of surveillance. It’s a good investment as a great deal of money is at stake. For example, a long-term disability claim for a 40-year-old employee making $100,000 a year could be worth about $1,625,000. And if they can catch a claimant with alleged chronic pain gleefully horseback riding, they have hit a home run.

Private investigators are usually more discreet, cunning and resourceful than my mystery grocery shopper example. In reality, claimants rarely know they are under surveillance. Investigators usually start with a deep background check. That will reveal where you live, what property you own and what vehicles are registered in your name. Any investigator worth their salt will dig deep into the annals of the internet. Employees making a disability claim would do well not to post to their Instagram or Facebook accounts any photographs depicting themselves participating in physical activity or attending jubilant events. And, of course, these accounts should be set as private.

Then, the surveillance starts. Investigators will wait outside your home for days. They will follow you to see if you are working elsewhere and get a sense of your everyday activities. Spy gear has advanced and has become affordable and discreet. Video footage is now the norm. Gone are the days of catching Joe claimant playing beer league hockey — at least until social distancing restrictions have relaxed.

Investigators need to be more creative and will push the limits on privacy. I recently discovered that an investigator videotaped one of our client’s at his local gym by gaining entry under the guise of a guest needing a tour of the facility.

While the surveillance footage was fortunately consistent with our client’s reported physical capabilities, spaces open to the public are generally fair game. So beware. The Ontario Court of Appeal recently held that surveillance at a yoga retreat was admissible in court.

Claimants seen exhibiting behaviour inconsistent with what they reported to their insurance company is not ideal and can be damaging to their case, but not always. Take, for example, a 2013 case in which a bricklayer claimed he could not work due to shoulder and back issues.

The insurance company had a week’s worth of surveillance video depicting the man landscaping, cutting patio stones, loading and pushing a wheelbarrow, planting trees and standing on a ladder painting and sanding a ceiling. He was also seen on a rambunctious ride at a local fair. The plaintiff was armed with an uncontested medical expert report supporting his position that he could not fulfill the essential duties of any occupation. Despite the video, the trial judge accepted the plaintiff’s explanation that he worked through the pain in short spurts with painkillers and required the comfort of a nightly heat pad.

He ultimately received over $235,000 in disability benefits, $200,000 in punitive damages and $25,000 for mental distress damages, plus about $180,000 for legal fees.

Not all plaintiffs will be as successful. If you have applied for disability benefits and intuitively identify with the late King of Pop Michael Jackson singing the chorus of Rockwell’s “Somebody’s Watching Me,” you probably have good reason. Be cautious. Courts appreciate you have good days and bad days. That said, it’s best not to give your insurer more incentive to deny or discontinue your claim. Enjoy the remaining days of summer, but refrain from engaging in any overly strenuous activity — at least not where you can be seen from afar.

Got a question about employment law during COVID-19? Write to me at levitt@levittllp.com.

Howard Levitt is senior partner of Levitt LLP, employment and labour lawyers. He practises employment law in eight provinces. He is the author of six books including the Law of Dismissal in Canada.