Farmers Insurance, a subsidiary of Zurich Insurance, recently filed a lawsuit against the Metropolitan Water Reclamation District of Greater Chicago, the City of Chicago and its suburbs for its failure to prevent flooding and sewage backups into homes related to climate change, according to reports. The insurance company is seeking reimbursement of claims the company paid to homeowners after a two-day extreme precipitation event in April 2013.

The issue of who will pay for climate-related risks is likely to come up in many future lawsuits, said Michael Gerrard at the Center for Climate Change Law at Columbia University in a story by Marketplace. Farmers, a subsidiary of Zurich Insurance Group, contends that local officials were aware that climate change will lead to heavier rainfall events, citing the city’s Climate Action Plan as evidence.  Farmers says that the municipalities could have prevented the damages by draining water from stormwater tunnels and retention basins in advance of the storm.

While the outcome and impact of the lawsuit remains to be seen, the lawsuit could be a precedent-setting case.  “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, Director of Insurance Programs at Ceres, told ClimateWire. “The dollars at stake are much smaller than the precedent that’s being set.”