Police employee settlement covered by insurance, city says

By Doug Petrowski

The money going to a former Mountlake Terrace police department employee to settle a lawsuit will come from the city’s insurance provider, not the city’s general fund, said City Manager John Caulfield on Friday.

As reported by our news partner The Seattle Times, the City of Mountlake Terrace reached a financial settlement with former police department employee Martha Karl totaling $587,500. The payment settles a lawsuit brought on by Karl that alleged Assistant Police Chief Pete Caw and other city officials conspired to have her fired for testimony she gave in separate litigation against the city.

“All costs associated with claims against the city are paid for by the City’s insurer, Washington Cities Insurance Authority,” Caulfield said. “They are the one who incur the costs and make the decisions on claims against its members, which included the City of Mountlake Terrace.”

While the City of Mountlake Terrace contracts for legal services, it does not budget for settlement costs to litigation. To address liability and property financial protection, the city is a member of the Washington Cities Insurance Authority, a liability risk pool of more than 150 municipalities in Washington state.

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