In a coverage dispute involving the construction of a solar power plant in Georgia, the Eleventh Circuit denied part of an insurer’s request for a “do-over” of its initial determination that certain rain events damaging the insured’s property fell under the category of “water” damage, rather than “flood” damage. Zurich Am. Ins. Co. v. First Solar Elec. LLC, No. 25-10606, 2026 WL 3166172 (11th Cir. Oct. 22, 2026).
First Solar Electric LLC (“First Solar”) purchased a master builders risk insurance policy from Zurich American Insurance Company (“Zurich”) that insured First Solar “against all risks of direct physical loss of or damage” to certain covered property. Five heavy rain events occurred between December 2019 and April 2020, during the policy’s coverage period. The policy covered both water and flood damage, but a $100,000 deductible applied to water damage and a $2.5 million deductible applied to flood damage. In February 2020, after the first three rain events, Zurich’s claims adjuster visited the site to inspect the damage. He recorded the events as water damage, not flood damage, and he told his supervising claims manager at Zurich that each of the first three events carried a $100,000 deductible. The adjuster also approved sending three $200,000 advance payments to First Solar, noting that the $100,000 deductible applied, and Zurich did not reserve any rights to change its coverage determination before issuing the payments.
Then, about six months after his site visit, the claims adjuster sent First Solar a status report that noted, for the first time, that the damage from the rain events may have been caused by floods and therefore subject to the policy’s $2.5 million deductible for flood damage. First Solar disputed that the events were caused by floods, and Zurich eventually confirmed its position that the flood deductible applied and that Zurich owed nothing to First Solar under the policy because the damages did not exceed the deductible for any of the five rain events. First Solar sued for breach of contract, waiver and estoppel, and reformation of contract.
On summary judgment, the district court ruled that, absent waiver, Zurich did not breach the parties’ contract because the flood deductible applied. The district court also ruled that Zurich waived application of the flood deductible. After a trial on damages only, the jury returned a verdict in favor of First Solar.
On appeal, Zurich argued, among other things, that it could not waive the application of the flood deductible to the rain events. First Solar cross-appealed, including an argument that, even if Zurich had not waived application of the flood deductible, the flood deductible was also $100,000 per event.
The Eleventh Circuit affirmed the district court’s judgment that Zurich waived the flood deductible for the first three rain events. The Court vacated the judgment as to the fourth and fifth rain events, finding that factual issues remained for the jury on whether Zurich waived the flood deductible for those rain events.
Writing for a panel that included Judges Newsom and Abudu, Judge Embry Kidd considered two questions of first impression in Georgia: (1) whether the flood deductible provision operated as a limitation on Zurich’s obligation to pay for a covered loss or, instead, as a limitation on the policy’s scope of coverage; and (2) if it operated as a limitation on Zurich’s obligation to pay, whether the flood deductible could be waived. The Court rejected Zurich’s argument that, under the policy, a loss is not covered until the insured’s amount of loss exceeds the deductible. Construing the plain meaning of the policy, the Court concluded that “[t]he deductible is subtracted from the amount of the claim, and Zurich is liable only for the resulting amount.” While the policy’s deductible provision limited the amount Zurich would pay for a covered loss, it did not limit the scope of the policy’s coverage. The Court further held that the flood deductible provision could be waived because the provision was a condition in the policy imposed for Zurich’s benefit, and the waiver of the provision would not result in expanding coverage to include a new, unassumed risk.
Noting that under Georgia law, implied waiver can be shown by “decisive, unequivocal conduct reasonably inferring the intent to waive,” the Court affirmed the district court’s summary judgment ruling that Zurich knew of and impliedly waived its right to apply the flood deductible to the first three rain events through the conduct of its claims adjuster and by making the unconditional advance payments. Moreover, the later status report by Zurich relating to the flood deductible could not undo that waiver; once waived, the condition could not be reclaimed. Because the claims adjuster’s conduct was with regard to the first three events, and Zurich did not make advance payments regarding the fourth and fifth events before its status report, the Court concluded that Zurich’s waiver regarding the fourth and fifth events remained a question for the jury. The Court also ruled that the policy’s suit-against-the-company provision providing that certain actions “will not be barred” if commenced within a certain time was not a suit-limitation provision that limited the time to file an action. The Court ruled that the district court did not abuse its discretion by denying Zurich’s motion for sanctions relating to one of First Solar’s trial witnesses. Finally, the Court rejected First Solar’s cross-appeal arguments.