What does ‘own occupation’ mean, in a TPD policy?

Last year the NSW Court of Appeal provided guidance on the meaning of ‘own occupation’.

The appeal concerned an unsuccessful claim under a life and total and permanent disability (TPD) policy in respect of a person (I will refer to him as the worker), who had provided construction management and project supervision services to a company for many years. The company took out the policy over the worker life and disability.

The company alleged that the worker became totally and permanently disabled after hip replacement surgery performed in November 2021. The judge at first instance dismissed the claim, finding that the worker remained able to perform the essential activities of his own occupation.

The policy provided for a TPD benefit to be paid if the worker was unable, because of illness or injury, to engage in their ’Own Occupation’ for three consecutive months and was unlikely ever again to do so.

The worker stopped working shortly before the hip replacement and later returned to work as a project supervisor. The surgery was successful, and after it the worker could still perform many of the activities he had undertaken for the company, but not all of them.  

The company lodged its TPD claim, supported by documents including a position description said to describe the worker’s duties in his ‘own occupation’. The insurer denied the claim.

The central issue for the Court’s decision was whether the worker was unlikely ever again to engage in the occupation he performed immediately before the hip surgery.

It was not controversial that his occupation just before the hip surgery was characterised as “Construction Manager/Project Supervisor”.

The insurer’s position was that post-surgery the worker could perform the essential activities of the “Construction Manager/Project Supervisor” occupation.

The company’s position was that the ‘own occupation’ definition required the parties to focus on the worker’s actual duties at the time he stopped work and not his resume.

The Court agreed. It found that ’own occupation’ required attention to the worker’s actual work rather than an abstract occupational classification.

If you are considering a TPD claim and there is uncertainty about how your occupation or work duties should be assessed, our team can help you understand the policy terms and your options. Contact us for clear and practical advice about your TPD claim.