Farmers Win $40 Million in Suit but OK $4.9-Million Settlement

A federal jury on Friday awarded $40 million to thousands of farmers who sued an insurance agent for overselling drought insurance before and during last year’s drought.

However, the farmers and Chubb Group, an insurance company that had joined them in their lawsuit against Good Weather International Corp., agreed to settle the lawsuit for $8 million, the amount of the agent’s liability insurance.

Chubb had accused New York-based Good Weather of selling more drought insurance than the insurance company had authorized.

The 8,800 farmers in 10 states will get $4.93 million and Chubb $3.07 million; they agreed to waive the remaining amount of the award against Good Weather.

“We’re very excited. It’s further proof that the farmers had really been taken advantage of,” said Stanley Chesley, lawyer for the farmers.

Chubb, of Warren, N. J., paid $53 million to settle farmers’ claims against it, then joined the farmers’ lawsuit against Good Weather, suing for $77 million in damages.

Good Weather had maintained that Chubb encouraged it to continue selling policies.

The jury ruled that Good Weather had misrepresented the drought insurance available to the farmers, but it ruled also that Chubb had failed to prove its cross-claims against Good Weather.

The lawsuit represented farmers from Ohio, Illinois, Iowa, Kentucky, Indiana, Tennessee, Minnesota, Michigan, Missouri and Wisconsin.