Zurich Owes $12.2 Million in Georgia Solar Farm Claim After Appeals Ruling

Zurich American’s initial handling of three rain damage claims left it unable to apply a much larger flood deductible later, the 11th U.S. Circuit Court of Appeals ruled in a dispute over a Georgia solar project. The decision leaves in place a $12.2 million award to First Solar for the first three events and sends claims tied to two later storms back to the district court. The ruling turns on two distinct questions: how the policy classified the damage, and whether Zurich could change its position after paying the claims under a different deductible.

Initial payments shaped the coverage dispute

First Solar was building a 200-megawatt solar plant near Warner Robins, Georgia, under a Zurich builder’s risk policy. Five episodes of heavy rain in 2019 and 2020 left standing water across the former farmland and damaged solar equipment. The sequence matters because the court assessed the first three events separately from the two later ones, rather than treating all five storms as a single, uniform claim.

Zurich’s adjuster initially classified the first three losses as water damage. The policy set a $100,000 deductible for each such event, and Zurich advanced $600,000 in total. Zurich later argued that the rain had produced flood losses, which carried a $2.5 million per-event deductible. Under that interpretation, the claimed damage fell below the deductible and no payment would be owed. The gap between the two deductibles was substantial: classification determined whether the insurer’s earlier payments stood or whether the claims could be treated as falling below the policy’s threshold.

The policy defined water damage as “all damage caused by water, whatever the source, whether or not driven by wind, other than that otherwise defined as flood or that resulting from a named storm.” First Solar argued that the site’s description as normally dry land, along with its location partly in a Level 3 flood area, supported treating the losses as water damage. The company’s insurance agent, John Shaw, also pressed Zurich and its adjuster to retain that classification. The dispute illustrates a common challenge in property coverage: broad terms can overlap, and the policy’s exclusions or separate definitions may determine which deductible applies to a particular event.

Appeals court finds Zurich waived the flood deductible

A jury in the U.S. District Court for the Middle District of Georgia found for First Solar, and the judge entered a $12.2 million judgment, including prejudgment interest. Both parties appealed aspects of the ruling. That appeal gave the circuit court an opportunity to address not only how the policy language applied, but also the effect of Zurich’s conduct after the losses were reported.

The appellate panel concluded that the policy and evidence pointed to the higher flood deductible for the first three events. But Zurich had already paid those claims under the water damage deductible and had not reserved its right to revisit the coverage decision. The court held that Zurich had therefore waived the flood deductible for those losses under Georgia law. In practical terms, the panel treated the timing and terms of Zurich’s payments as consequential: an insurer’s later interpretation may not undo an earlier decision when the insurer didn’t preserve that option.

Judge Embry Kidd framed the dispute as whether Georgia law allowed Zurich “to take a mulligan—to receive a do-over after messing up the first time.” The court’s answer was no: Zurich could not change its position after making the payments without reserving that right. The phrasing is pointed, but the holding rests on the insurer’s handling of these specific claims and the absence of a reservation. This is more significant than it looks for claims operations: classification decisions can shape the available arguments later, especially when money has already changed hands.

The ruling upheld the district court’s outcome for the first three rain events. For the two later events, the appeals court found the flood deductible applied and remanded the claims for further proceedings. Those claims therefore remain unresolved by the appellate decision, and their treatment can’t be inferred from the result for the earlier losses.

Policy deadline clause did not bar the suit

The panel also rejected Zurich’s reading of a separate policy clause as requiring First Solar to bring suit within 12 months of the losses. The judges concluded that the “suit against the company” provision did not set a deadline for filing litigation. That conclusion removed one potential obstacle to First Solar’s case, while leaving the deductible analysis to turn on the separate facts surrounding each group of storms.

For policyholders and insurers, the distinction is useful: a clause that describes a suit against an insurer doesn’t necessarily establish a filing deadline. The opinion’s treatment of that language is tied to this policy, though, and doesn’t establish that every policy’s wording will be read the same way. If you’re working in claims or coverage, the practical lesson is to read deadline provisions in their full contractual setting and document how an initial classification is being made.

What the ruling leaves open

The opinion, issued Oct. 22, turns on the consequences of an insurer’s claim classification and payment decisions. Zurich’s failure to reserve its position proved decisive for the first three losses; the remaining two claims will be considered under the flood deductible. That split is the central point: similar rain events at the same project didn’t produce one automatic outcome across the entire claim.

For the remanded claims, the district court will continue proceedings with the flood deductible applying. The appellate ruling doesn’t specify the ultimate amount payable on those two events. Here's the thing: the policy language supplied the framework, but Zurich’s actions determined how that framework could be used for the first three claims. A missed reservation. And yet the later claims remain subject to a different result, underscoring how coverage decisions can turn on both contract wording and the record of how a claim was handled.