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Council approves coverage waiver so Travelers can fund settlement fees; city reports no general-fund exposure
Summary
Sunnyside approved a coverage-waiver agreement Oct. 27 that enables Travelers (an excess insurer) to contribute $30,000 toward attorney fees necessary to settle a long-running lawsuit. City attorneys said the settlement will be paid from insurance pools and Travelers' contribution removes the city's obligation to cover the attorney-fee shortfall.
The Sunnyside City Council on Oct. 27 approved a coverage-waiver agreement requested by Travelers insurance that will allow Travelers to contribute $30,000 toward attorney fees needed to settle a lengthy lawsuit involving the city. The city's insurance pool had offered settlement at its policy limits, but coverage exclusions left a gap for an attorney-fees component; Travelers agreed to pay the additional $30,000 provided the city signs a waiver of coverage claims against that carrier.
City Attorney Norton told the council the insurance pool is settling for the pool limits (summarized as a $7.17 million combined pool figure across carriers) and Travelers' contribution resolves the attorney-fee gap so the pool can complete settlement without the city paying from its general fund. Norton explained the waiver prevents the city from pursuing a bad-faith insurance claim against Travelers in exchange for the payment.
Councilors asked for the financial totals and Norton confirmed the city would not owe any settlement funds out of the general fund thanks to the carriers' payments. Council approved the coverage-waiver by voice/recorded vote; the city manager and attorney said they expect final settlement administration to proceed through the insurers and the case to be closed without further city expenditure.
