A 12-person jury on Sept. 24 determined that the village of McFarland is owed the full costs it incurred to remediate a sinkhole that collapsed beneath the McFarland Public Safety Center during its construction in 2023, according to a recent announcement.
The village filed suit against the Hanover Insurance Co. last year, claiming Hanover did not fulfill the terms of its insurance policy when it refused to pay the full amount of the village’s approximately $1.68 million claim for remediation costs following the sinkhole collapse.
Hanover, which had issued a builder’s risk policy to McFarland in September 2021 to cover property damage during construction of the new public safety building, originally denied the village’s claim.
After an 11-month delay, the company eventually paid the village just over $700,000, despite provisions in the policy that expressly provided coverage for costs related to sinkhole collapse and a cumulative coverage limit of more than $18 million.
At trial, the jury determined that the village was entitled to the entire amount of the claim, which will require Hanover to pay the remaining balance of $974,669. Hanover may also be required to pay interest and the Village’s litigation costs, though this will be addressed by the court at a later time.
In addition to the claim for remediation costs, the complaint filed by the village against Hanover in the Dane County Circuit Court in March 2024 alleges that Hanover’s initial denial of the village’s claim and eventual determination to pay the village only approximately $700,000 were made in bad faith, relying on unreasonable misinterpretations of the policy’s language.
This matter will be heard separately and will determine whether the village is entitled to additional damages.
