Major insurance company sues US municipalities for climate change negligence

Major US insurance company Farmers, owned by multinational financial services company Zurich, the world’s 75th largest public company, has launched class action suits against dozens of US municipalities alleging negligence in management of storm drainage. The suits stem from flooding which occurred last year and which Farmers claims was caused by the effects of climate change and ignored by the municipalities.

The insurer claims that local officials are aware that climate change is causing heavier rainfall but that they have not taken measures to alleviate the resulting flooding. The suits seek reimbursement to the insurance company of moneys paid out to policy holders to compensate for flood damage.

This is a Goliath versus Goliath legal battle which could prove to be an important game changer with respect to municipal government climate change policy. Legal experts consulted by GallonDaily think that Farmers has only a slight chance of winning but it may not be too long before the strategy, which is being rolled out in several parts of the US, finds a judge or jury willing to find in favour of the insurance company. Then it will likely be on the way to the Supreme Court. The key issue is not so much whether the municipalities have ignored the likely increase in flooding resulting from climate change but whether municipal governments are protected in law from liability for this type of policy inaction.

There is also speculation that the municipalities will in turn sue the engineering firms that advised them on their drainage plans.

Note that the legal situation facing Canadian municipalities is not the same as that facing US municipalities and the outcome of this series of suits may or may not have applicability in Canada.

Environment and Energy Publishing is making a more complete report on the Farmers Insurance suit available at

Zurich offers a flood resilience program for communities and policyholders, primarily in developing countries. A brochure about the program is available at

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