The interplay between the duty to inform about the contents of contracts—particularly the clauses on total and permanent disability (in its various modalities) set out in life insurance policies—and the consequences of an occupational accident is a recurring issue in legal advice on insurance matters in Portugal and has led to very interesting recent case law.
This is because, in certain cases (where it may be debated whether the consumer had full knowledge of the insurance contract), situations may arise in which, although the Permanent Partial Disability (IPP) determined within the scope of an occupational accident is not equivalent to the degree of disability contractually provided for under the life insurance contract, the determination of Permanent Absolute Disability for the Usual Occupation (IPATH) may give rise to a request to trigger the life insurance coverage.
This issue was addressed in a recent judgment of the Lisbon Court of Appeal dated 15.07.2025, available at https://www.dgsi.pt, which held that, in the case at hand, the consumer (the injured party) was not aware of the full content of the life insurance contract in which they were insured. This led to the exclusion (through the application of the legal regime on standard contract terms) of the clause establishing the requirements for triggering the total and permanent disability coverage. As a result, it became necessary to determine the meaning of that concept through legal interpretation.
The injured party argued that, since they suffered from IPATH in the context of an occupational accident, they should necessarily be considered totally and permanently disabled for purposes of triggering the life insurance contract. However, although IPATH implies the impossibility of maintaining one’s professional activity within the scope of occupational accidents, this does not automatically amount to total and permanent disability under a life insurance contract. This is because, in order to rely on the concept of IPATH to trigger the life insurance coverage, it must be demonstrated that such disability prevents the insured from securing means of subsistence.
In this regard, the judgment is clear in its summary, stating: “Having the claimant proved only that she was the victim of an occupational accident, having been left with a 13% IPP and IPATH, without demonstrating that such disability prevents her from securing means of subsistence, such facts are insufficient to constitute total and permanent disability, even resorting to the hypothetical will of the parties (cf. Article 9 of the LCCG).”
The court went further, concluding: “To attribute to IPATH the effects of IPA is to fictionalise two distinct realities. Even excluding the clause that was not communicated to the Claimant, and maintaining the validity of the insurance contract under which she is the beneficiary, we cannot conclude that the Defendant is obliged to pay the Claimant compensation on the basis of disability that is not total, but only partial.”
This judgment raises again the ever‑pressing issue that the duty to provide information at the time of concluding an insurance product is essential for its proper application and execution. Its breach may lead to the exclusion of policy content. The insurance litigation team of Belzuz Advogados, S.L.P. in Portugal has extensive experience in legal advisory services concerning claims portfolios, which is of fundamental importance in the exercise of the associated rights.