FIRST SOLAR ELECTRIC LLC v. ZURICH AMERICAN INSURANCE COMPANY, 5:21-cv-00408

First Solar Electric LLC was building a solar farm in Twiggs County, Georgia, and obtained a Master Builder Risk (MBR) insurance policy from Zurich American Insurance Company.
The policy’s deductible for flood damage was determined based on the flood risk zone of the project site, set at 2% with a maximum of $2.5M for properties in Flood Zone A (high risk).
Between December 2019 and April 2020, five separate heavy rain events damaged the solar project, leading First Solar to file insurance claims for these losses.
Zurich initially treated and paid advances on the claims using a $100,000 deductible, consistent with “water damage” coverage, but later asserted that the $2.5M flood deductible applied to each event.
After prolonged communications and failed alternative dispute resolution, First Solar sued Zurich, seeking a declaration on the deductible, breach of contract, waiver and estoppel, bad faith, and reformation of the policy.
The parties filed cross-motions for summary judgment.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Applicability of suit limitation clause	Zurich waived the 12-month limit by actions/assurances	First Solar’s claims barred by 12-month suit limitation	Issue of fact; summary judgment denied
Definition of “flood” and applicable deductible	Losses are “water damage,” so $100K deductible applies	Losses are “flood,” so $2.5M per event deductible applies	Flood definition unambiguous; supports Zurich
Waiver of deductible position	Zurich waived higher deductible by unconditional payments	Deductible is a nonwaivable coverage defense	Deductible is policy defense and waivable
Reformation for mutual mistake	Parties misunderstood “insured project” location	Both parties intended high-deductible flood zone to apply	No evidence of mutual mistake; claim denied
Bad faith claim	Zurich acted in bad faith by refusing further payment	No 60-day pre-suit demand; Zurich’s position was reasonable	No pre-suit demand; not bad faith

Richmond v. Ga. Farm Bureau Mut. Ins. Co., 140 Ga. App. 215 (Ga. Ct. App. 1976) (insurance contracts interpreted by ordinary rules of contract construction)
Boardman Petrol., Inc. v. Federated Mut. Ins. Co., 269 Ga. 326 (Ga. 1998) (policy ambiguity construed against the insurer)
Canal Ins. Co. v. Bryant, 173 Ga. App. 173 (Ga. Ct. App. 1984) (burden on insurer to prove policy exclusions)
Sorema N. Am. Reinsurance Co. v. Johnson, 258 Ga. App. 304 (Ga. Ct. App. 2002) (courts must apply plain policy definitions where unambiguous)
CS-Lakeview at Gwinnett, Inc. v. Simon Prop. Grp., Inc., 283 Ga. 426 (Ga. 2008) (mutual mistake for reformation requires clear evidence)
Forsyth Cnty. v. Waterscape Servs., LLC, 303 Ga. App. 623 (Ga. Ct. App. 2010) (waiver of contractual provisions)
Sargent v. Allstate Ins. Co., 165 Ga. App. 863 (Ga. Ct. App. 1983) (distinction between policy and coverage defenses)
Lee v. Mercury Ins. Co. of Georgia, 343 Ga. App. 729 (Ga. Ct. App. 2017) (bad faith penalty standards in Georgia)