TPD rights extend beyond bankruptcy
Plaintiff law firm, Shine Lawyers, has sought to highlight a Western Australia Supreme Court case in which it was held that the proceeds of Total and Permanent Disability (TPD) insurance policies belong exclusively to the TPD claimant, and are beyond the reach of creditors in bankruptcy.
The company has cited a case in the WA Supreme Court earlier this year — Berryman v Zurich Australia Limited, in which a large granite rock crushed a man's right foot while he was at work, disabling him for life.
It said legal proceedings had been against Zurich Insurance, which refused to pay the man his $2 million lump-sum TPD insurance policy benefit and that due to business loans that had gone bad as a result of his accident, the man had become bankrupt after commencing the action.
According to Shine Lawyers, the question to be determined by the Court was whether provisions in Australia's Bankruptcy Act 1966 put the TPD benefit beyond the reach of his creditors in bankruptcy. In what is being described as a first in the Australian legal system, the presiding judge found in favour of the man.
The Shine Lawyers analysis noted that it frequently occurred that serious personal injury went hand-in-hand with serious financial difficulties.
"The decision squarely puts the Australian insurance industry on notice to respect the rights of personal injury claimants, even in bankruptcy," it said.
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