Insurers Ordered To Pay $60M in Bad Faith Disability Claim

Paul Revere Life Insurance Company and its parent company Unum Provident were ordered to pay $60 million to a Las Vegas man for acting in bad faith when they denied his valid disability claim.

The case

According to court records, G. Clinton Merrick, Jr. purchased a disability policy from Paul Revere Life Insurance Company in 1989 which entitled him to a total disability benefit of $12,000 per month for the duration of his disability if he became unable to perform the important duties of his occupation. At the time, Merrick was a venture capitalist with two other partners. In the early 1990’s, he was diagnosed with Chronic Fatigue Syndrome (CFS) and Lyme Disease and was unable to work. The partners bought him out of the business and Merrick sought to collect on the insurance policy.

Revere paid his disability claim for approximately two years, but then questioned his diagnoses and had one of its doctors examine Merrick. That doctor concluded that Merrick may be able to return to work – which would mean the termination of his disability benefits. Merrick disagreed and Revere asked for additional medical reports – which Merrick provided. However, Revere continued to deny his claim and he sued the insurer and its parent company, Unum Provident, alleging breach of contract and the duty of good faith and fair dealing.


A jury awarded Merrick over $11 million - $1.1 million in unpaid benefits, $500,000 for mental and emotional distress and $10 million in punitive damages. The insurers appealed and a new trial was granted due to erroneous jury instructions by the lower court. However, the insurers would have been better served with the first verdict. The case was retried with a different jury who awarded Merrick $60 million – most of which consisted of punitive damages.

Have you been denied valid benefits?

Insurance companies have a duty to treat their policyholders with good faith and deal with them fairly. If you’ve been denied valid insurance benefits, make sure to contact an attorney whose practice focuses in bad faith insurance litigation. Consultations are free, without obligation and strictly confidential. To contact a qualified attorney, please click here. We may be able to help.

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