The first step any person who is covered by group disability insurance should consider on termination of employment is to undergo a comprehensive medical examination. Prior to signing a release and completing a settlement agreement, which will end all claims, the individual should have complete knowledge of any medical vulnerability. Any disability which the person may potentially occur in the common law notice period should be assessed.

The release will relinquish all claims against the employer and any other party against whom an indemnity or third party action may be commenced, which will likely apply to the insurer.

The claim for disability benefits is live against the insurer should the disability be proven while employed, or in Ontario, within the statutory period of notice, as reviewed here. Similarly, there will be a possible claim against the employer should the disability arise within the common law notice period. Both such claims may be made for the extent of the total period of disability.

The same step should be ideally taken by any person resigning employment prior to the cessation of “active employment”. This is also true where an individual has new employment waiting as they will then risk the loss of new disability coverage based on a pre-existing disability.

Few people will follow these cautions, but they are very important.