Madison Reporter

A Dane County jury has ruled that the Village of McFarland is entitled to more than $1.6 million from its former insurance provider, Hanover Insurance Company, following a dispute over coverage for a sinkhole collapse at the village’s Public Safety Center during construction in 2023.

The verdict was delivered on September 24, 2025, after the Village sued Hanover last year. The lawsuit claimed that Hanover failed to honor its builder’s risk policy by not paying the full remediation costs related to the sinkhole incident. The policy, issued in September 2021, covered property damage during construction and had a cumulative limit exceeding $18 million.

Initially, Hanover denied the Village’s claim and later paid just over $700,000—less than half of the approximately $1.68 million claimed by McFarland for repair expenses. After an 11-month delay and subsequent legal proceedings, the jury determined that Hanover must pay the remaining balance of $974,669. The court will decide later whether Hanover must also cover interest and litigation costs.

“We are beyond pleased that the jury awarded the Village the full amount of its claim,” said Village Administrator Matt Schuenke. “As I explained during testimony, this has been a long, multi-year journey, and now, finally, we have reached some level of accountability for this loss. Without our Village Board stepping in to authorize the lawsuit and the jury stepping up to hold the insurance company accountable, McFarland taxpayers would have unfairly covered the costs of the sinkhole collapse.”

Schuenke expressed gratitude toward attorneys Allen Reuter and Daniel Evans from Reuter, Whitish & Evans for representing McFarland in court. He also thanked design, engineering, and contracting experts involved with both construction and remediation efforts who testified as witnesses.

Beyond reimbursement for repair costs, McFarland’s complaint filed in March 2024 alleges that Hanover acted in bad faith when it initially denied coverage and later paid only part of what was claimed. This aspect of potential additional damages will be considered separately by Dane County Circuit Court.