An Introduction to Commercial Disability Insurance

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According to a recent study by the Hartford Financial Services Group, about 55 to 60 percent of Gen Y workers do not own short-term disability and long-term disability insurance policies. This is a problem because the average twenty-year-old worker has a three in ten chance of suffering either a short-term or long-term disability at some point in his or her career.

With that in mind, here is some more information regarding commercial disability insurance. If you reside in Canada and have additional questions, make sure to contact the Mirian Law Firm of Toronto.

An Overview of Commercial Disability Insurance

Also known as income protection insurance, disability insurance is a type of insurance product that protects a beneficiary against the risk of losing the opportunity to earn an income (paycheck) due to a disability or illness.

This is particularly important because your ability to earn an income allows you to invest in other assets, such as stocks, your home, and other valuables. In other words, your ability to earn an income is your greatest asset. Unfortunately, a recent survey revealed that most American workers couldn’t make it a month without their paycheck without having financial problems. This is where disability insurance comes in handy. There are various types of commercial disability insurance products on the market today. These include the following:

Business Overhead Expense — This coverage compensates a business for overhead expenses should the business owner suffer an illness or a disability. Some of the eligible benefits include mortgage payments, employee benefits, employee salaries, rent, property tax, and utilities.

Employer-Provided Disability Insurance Plans — Most employer-provided disability insurance plans only replace about 60 percent of a beneficiary’s income. Even worse, the IRS considers the monthly benefits taxable income, meaning that the beneficiary gets less than 60 percent of his or her disability income.

Denial of Disability Insurance Benefits

It is important to note that your insurer may deny you your disability insurance due to one reason or another. The most common reasons for denied disability claims include policy exclusions, having a pre-existing medical condition, failure to meet the eligibility requirements, clerical or procedural errors, misrepresentation while filling out your insurance application, contradictory surveillance, and failure to provide sufficient information.

In the event that your application is denied, a Toronto disability insurance lawyer can help you file an appeal and obtain the benefits you are rightfully enititled to.


Research shows that the average worker has about a 33 percent chance of suffering a disability during the course of his or her career. Additionally, most workers live from paycheck to paycheck. For these reasons, commercial disability insurance is vital. Because most commercial disability plans replace less than 60 percent of a beneficiary’s income, you should enroll in multiple plans.