MCFARLAND, Wis. – On Wednesday, September 24, 2025, a 12-person jury 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.
The Village filed suit against the Hanover Insurance Company 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 the Village 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.
“We are beyond pleased that the jury awarded the Village the full amount of its claim,” Village Administrator Matt Schuenke said. “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 also offered thanks to attorneys Allen Reuter and Daniel Evans, both of the Madison-based firm Reuter, Whitish & Evans, who represented the Village in this case, as well as the design, engineering, and contracting experts who were involved with construction of the Public Safety Center and remediation of the sinkhole damage, and who served as witnesses for the plaintiff.
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.
