MACON, Ga. — In the tranquil fields of Twiggs County, a legal storm brews as First Solar Electric faces off against Zurich American Insurance over the interpretation of a policy that could affect a $13 million claim. The solar company’s sprawling 2,000-acre farm project fell victim to several severe rainstorms between 2019 and 2020, leading to considerable destruction that the company believed was covered under their insurance plan.
First Solar asserts that the damage, which includes the deterioration of onsite roads and prior construction, was the result of “torrential” rain. They approached Zurich in 2020 seeking to recover the losses. However, the insurer conducted an investigation that spanned over a year and eventually denied the claim, leading First Solar to file a lawsuit in November 2021.
The core of the dispute hinges on the differences in the insurance policy terms for “water damage” and “flood damage.” According to the lawsuit, First Solar’s flood policy, which is influenced by their proximity to the Flint River, includes a deductible of $2.5 million, markedly higher than the $100,000 deductible for water damage.
Zurich American contends that the damage should be classified as “surface waters,” falling under the flood category rather than water damage. First Solar disagrees, pointing out that neither “the sky nor rain” are mentioned in the flood policy provisions, which should lead to their claim being assessed under the more favorable water damage policy.
After denying the claim, Zurich issued a mere $600,000 for immediate storm relief, a fraction of what was requested. First Solar criticized the insurer’s decision-making process as “outrageous” and a breach of their contract, setting the stage for a contentious trial.
The showdown will commence in Downtown Macon at the federal courthouse with jury selection on Monday. Jurors will be tasked with a seemingly straightforward but crucial question: Does the damage align more with water damage or flooding?
The trial, undoubtedly, will weigh heavily on First Solar, which seeks to recoup $13 million based on the extent of the storm’s devastation. Zurich, on the other hand, will argue to absolve itself of further financial responsibility.
This incident underscores a broader issue faced by businesses operating near potential flood zones and the complexities involved in distinguishing between different types of water-related damage within insurance policies. As climate patterns evolve and severe weather events become more frequent, the outcome of this case may set significant precedents for how similar cases are handled in the future.
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