Not ready for climate change? Your town may get sued

As experts warn that every continent will be impacted by climate change, there's yet another danger on the horizon: Getting sued over failing to prepare for worsening weather.

Farmers Insurance is suing the city of Chicago and about 200 local municipalities for allegedly failing to adequately prepare for the impact of climate change, in what's described as the first-of-its-kind legal argument. At the heart of the class-action lawsuits is a storm that hit the Chicago area on April 17, 2013, described by CBS station WBBM as so bad that some neighborhoods were only navigable by boat. The storm also shut down major expressways and flooded hundreds of basements and streets.

While some might cite the storm as simply bad luck for Chicago-area towns, Farmers Insurance is claiming that the towns had the time and opportunity to prepare their storm-water and sewer systems, but failed to "implement reasonable pre-storm practices." While many already-strapped municipalities grapple with the costs and impact of climate change, the lawsuit may indicate a strategy from insurers to mitigate payouts, given that claims related to worsening weather events are likely to rise.

"I guess if you're an insurer that's really worried about the scale of liability that you might face from climate change, this would be a pretty smart way to begin to put up some walls around yourself," Andrew Logan, an insurance expert with Ceres, told Environment & Energy Publishing. "The dollars at stake [in the Illinois case] are much smaller than the precedent that's being set."

Farmers Insurance cites the Chicago Climate Action Plan, a document that outlines the risks of climate change and strategies for coping with it, as evidence that the towns knew of the danger of increasingly heavier storms.

"During the past 40 years, climate change in Cook County has caused rains to be of greater volume, greater intensity and greater duration than pre-1970 rainfall history evidenced, rendering the rainfall frequency return tables employed by the Reclamation District and each Named Municipal Defendant inaccurate and obsolete," a suit filed in Cook County claims.

The upshot? Farmers Insurance is alleging the towns "breached" their duty to upgrade their sewer and water systems, which the lawsuit claims is the reason for the property damage suffered during the storm.

"Many sanitary sewer water invasions from this Defendant's sanitary sewers were so rapid that geysers of sewer water shot out from floor drains, toilets, showers and other basement floor openings in members of the Plaintiffs' Class," the lawsuit claims.

The Metropolitan Water Reclamation District of Greater Chicago said it had no comment since it hasn't been served with the lawsuit.

"Farmers has taken what we believe is the necessary action to recover payments made on behalf of our customers for damages caused by what we believe to be a completely preventable issue, as well as to prevent it from happening again," Farmers spokesman Farmers spokesman Trent Frager said in an emailed statement. "It is important to note that water districts and other storm water stakeholders are insured for this very type of loss, and Farmers is not seeking public funds."

If the lawsuit is successful, it's likely that local residents will end up footing the bill, Daniel Jasica of the State's Attorney's Office in Lake County, told Reuters. Lake County was named in the lawsuit.

"If these types of suits are successful -- where is the money going to come from to pay the lawsuits? The taxpayers," Jasica said.