Insurers keep eye on climate change lawsuit

Insurance companies around the world will be keenly watching a lawsuit in the US where Farmers Insurance is suing communities for failing to prepare for flooding. 

Farmers Insurance filed nine class action lawsuits against nearly 200 communities in Chicago, claiming they did nothing to prevent the damages of global warming even though they knew it would lead to more rain and flooding.

The lawsuit could set a precedent for who is responsible for dealing with climate change with the legal debate focusing on if the events were foreseeable or an ‘act of God.’

Robert Verchick, who served on the Obama administration’s Climate Change Adaptation Task Force, was quoted in the Christian Science Monitor, as saying this is an uphill battle for insurance companies.

“It’s a long shot for the insurance companies, but it’s not completely implausible, and if you have enough cases like this going forward it might build some helpful precedent,” Verchick says.

Verchick also says insurance companies have voiced their concern over who should be investing in preventing climate change.

Michael Gerrard, Director of the Center for Climate Change Law at Columbia Law School in New York, says he expects it become a more frequent topic of debate.

“We will see more and more cases,” Gerrard says.

“No one is expected to plan for the 500-year storm, but if horrible events are happening with increasing frequency, that may shift the duties.”