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Five heavy rainstorms damaged a solar power project in Georgia between December 2019 and April 2020, leading to an insurance dispute over how the losses should be classified. Zurich American Insurance Company initially treated the damage as water-related and made payments totalling $600,000 to First Solar Electric LLC. The insurer later argued that the incidents should be classified as flooding, which carried a much higher deductible of $2.5 million per event. In an October 2026 ruling, a federal appeals court examined whether the insurer could change its position after making the earlier payments. The project covered 1,038 acres and was insured under a master builders risk policy purchased from Zurich American Insurance Company, according to the US Court of Appeals for the Eleventh Circuit in its October 2026 opinion. The storms occurred on or around 13 December 2019, 5 February 2020, 13 February 2020, 3 March 2020 and 18 April 2020. Klaben inspected the project in February 2020 and initially recorded the losses as water damage, according to the court’s account.
The dispute concerned a large solar power plant that First Solar was constructing in central Georgia. As the court explained in its judgment, rainwater accumulated on the ground and spread across the site, damaging solar arrays, access roads, security fences and other construction work, including electrical and structural components. These provisions became important when Zurich reconsidered its initial assessment. Zurich assigned adjuster Scott Klaben to investigate First Solar’s claims. The court noted that Zurich had not reserved its right to change its coverage decision before making those payments. In other words, the company did not state that it might later reconsider the classification and apply a different deductible. The district court ruled that the flood deductible applied under the policy but that Zurich had waived its right to impose it on the rain-related claims. It also rejected the insurer’s argument concerning the timing of the lawsuit.
the court had to determine whether the company could apply the higher deductible after already making payments under its earlier decision Although the insurer eventually concluded that the incidents qualified as flooding. First Solar brought the dispute before the US District Court for the Middle District of Georgia.