Chapter 26.40
LIABILITY, INDEMNIFICATION AND SECURITY

Sections:

26.40.010    Warranty and liability.

26.40.020    Insurance.

26.40.030    Indemnification.

26.40.040    Security fund.

26.40.050    Construction bond.

26.40.060    Work of contractors and subcontractors.

26.40.010 Warranty and liability.

(1)    For a period of two years after satisfactory completion of work in a right-of-way, the grantee warrants and guarantees the quality of the work performed and is responsible for maintaining the site free from any defects resulting from the work and, in the event of such defects, for repairing or restoring the site to a condition that complies with all applicable law and regulations. Any repair or restoration during the warranty period shall cause the warranty period to run for one additional year beyond the original two-year period with respect only to what was repaired.

(2)    The issuance of a right-of-way work permit or any inspection, repair, suggestion, approval, or acquiescence of any person affiliated with the city does not relieve the grantee from the warranty and liability provisions of this section, the indemnification provisions of Section 26.40.030, or any other term or condition of this title. (Ord. 4891 § 1, 2024; Ord. 4853 § 2, 2023)

26.40.020 Insurance.

(1)    Unless otherwise provided by a franchise or other agreement to use the right-of-way, each grantee shall, as a condition of the grant, secure and maintain the following liability insurance policies (which may be evidenced by an acceptable certificate of insurance) insuring both the grantee and the city, and its elected and appointed officers, officials, agents, representatives and employees, as additional insureds:

(a)    Commercial General Liability Insurance Written on an Occurrence Basis. The insurance policy shall be endorsed to provide a per project general aggregate and there shall be no exclusions for liability arising from explosion, collapse or underground property damage. The policy shall have limits not less than:

(i)    Five million dollars for bodily injury, property damage, products-completed operations, stop gap liability, personal injury and advertising injury, and liability assumed under an insured contract;

(ii)    Six million dollars general aggregate, per project aggregate and products-completed operations aggregate.

(b)    Automobile liability insurance covering all owned, nonowned, hired and leased vehicles with a minimum combined single limit for bodily injury and property damage of five million dollars per accident.

(c)    Worker’s compensation within statutory limits and employer’s liability insurance with limits of not less than one million dollars. Grantee may satisfy this requirement by being a qualified self-insurer.

(d)    Excess or umbrella liability insurance shall be written with limits of not less than five million dollars per occurrence and annual aggregate. The excess or umbrella liability requirement and limits may be satisfied instead through grantee’s commercial general liability and automobile liability insurance, or any combination thereof that achieves the overall required limits.

(2)    The liability insurance policies required by this section shall be maintained by the grantee throughout the term of the franchise or other agreement to use the right-of-way, and such other period of time during which the grantee is operating without a franchise or other agreement to use the right-of-way, or is engaged in the removal of its utility services or telecommunications facilities. The grantee shall provide a certificate of insurance (COI), together with the additional insured endorsement(s), to the city upon acceptance of the franchise or other agreement to use the right-of-way. Payment of deductibles and self-insured retentions shall be the sole responsibility of the grantee. The insurance required by this section shall apply separately to each insured against whom a claim is made or suit is brought. The grantee’s required insurance shall be primary insurance with respect to the city, its officers, officials, employees, agents, engineers, and consultants.

(3)    Any insurance, self-insurance, or self-insured pool coverage maintained by the city shall be excess of the grantee’s required insurance and shall not contribute with it. Receipt by the city of any certificate or evidence of insurance showing less coverage than required is not a waiver of grantee’s obligations to fulfill the requirements. Grantee may utilize primary and excess liability insurance policies to satisfy the insurance policy limits required in this section. Grantee’s excess liability insurance policy shall provide follow form coverage over its primary liability insurance policies.

(4)    Grantee is obligated to notify the city of any cancellation or intent not to renew any insurance policy required pursuant to this section thirty days prior to any such cancellation. Within fifteen days prior to said cancellation or intent not to renew, grantee shall obtain and furnish to the city replacement insurance policies meeting the requirements of this section. Failure to provide the insurance cancellation notice and to furnish to the city replacement insurance policies meeting the requirements of this section shall be considered a material breach of the franchise or other agreement to use the right-of-way.

(5)    Grantee’s maintenance of insurance, its scope of coverage and limits as required herein shall not be construed to limit the liability of the grantee to the coverage provided by such insurance, or otherwise limit the city’s recourse to any remedy available at law or in equity. If the grantee maintains higher insurance limits than the minimums shown above, the city shall be insured for the full available limits of commercial general and excess or umbrella liability maintained by the grantee, irrespective of whether such limits maintained by the grantee are greater than those required by this code or whether any certificate of insurance furnished to the city evidences limits of liability lower than those maintained by the grantee. Further, grantee’s maintenance of insurance policies required by the franchise or other agreement to use the right-of-way shall not be construed to excuse unfaithful performance by grantee.

(6)    Upon approval by the city and based on conditions set by the city in the franchise or other agreement to use the right-of-way, the grantee may self-insure under the same terms as required by this section. Further, the director may modify these insurance requirements within the franchise or other agreement to use the right-of-way as they deem necessary to comply with the city’s risk management policies; provided, that any such changes provide adequate protection for the city. (Ord. 4891 § 1, 2024; Ord. 4853 § 2, 2023)

26.40.030 Indemnification.

(1)    As consideration for the issuance of a franchise or other agreement to use the right-of-way, the agreement shall include an indemnity clause substantially conforming to the following:

(a)    Grantee hereby releases, covenants not to bring suit and agrees to indemnify, defend, and hold harmless the city, its elected and appointed officers, officials, employees, agents, engineers, consultants, and representatives from any and all claims, costs, judgments, awards, or liability to any person arising from injury, sickness, or death of any person or damage to property:

(i)    For which the negligent acts or omissions of grantee, its agents, servants, officers or employees in performing the activities authorized are the proximate cause;

(ii)    By virtue of grantee’s exercise of the rights granted herein;

(iii)    By virtue of the city’s permitting grantee’s use of the rights-of-way;

(iv)    Based upon the city’s inspection or lack of inspection of work performed by grantee, its agents and servants, officers or employees in connection with work authorized on a telecommunications facility or rights-of-way;

(v)    Arising as a result of the negligent acts or omissions of grantee, its agents, servants, officers or employees in barricading, instituting trench safety systems or providing other adequate warnings of any excavation, construction, or work upon a facility, in any rights-of-way in performance of work or services;

(vi)    Based upon radio frequency emissions or radiation emitted from grantee’s equipment located upon a telecommunications facility, regardless of whether grantee’s equipment complies with applicable federal statutes and/or FCC regulations related thereto.

(b)    Grantee’s indemnification obligations pursuant to subsection (1)(a) of this section shall include assuming potential liability for actions brought against the city by grantee’s own employees and the employees of grantee’s agents, representatives, contractors, and subcontractors even though grantee might be immune under RCW Title 51 from direct suit brought by such an employee. It is expressly agreed and understood that this assumption of potential liability for actions brought against the city by the aforementioned employees is with respect to claims against the city arising by virtue of grantee’s exercise of its rights. In addition to the indemnification obligations throughout this section, the obligations of grantee under this subsection (1)(b) shall be mutually negotiated between the parties. Grantee shall acknowledge that the city would not enter into an agreement without grantee’s waiver thereof. To the extent required to provide this indemnification and this indemnification only, grantee will waive its immunity under RCW Title 51 relating solely to indemnity claims made by the city directly against grantee for claims made against the city by grantee’s employees as provided in RCW 4.24.115.

(c)    Inspection or acceptance by the city of any work performed by grantee at the time of completion of construction shall not be grounds for avoidance of any of these covenants of indemnification. Provided that grantee has been given prompt written notice by the city of any such claim, said indemnification obligations shall also extend to claims which are not reduced to a suit and any claims which may be compromised, with grantee’s prior written consent, prior to the culmination of any litigation or the institution of any litigation. The city has the right to defend or participate in the defense of any such claim and has the right to approve any settlement or other compromise of any such claim.

(d)    In the event any such suit, claim or demand is presented to or filed with the city, the city shall notify grantee thereof, and grantee shall have the right, at its election and at its sole cost and expense, to settle and compromise such suit, claim or demand, or defend the same at its sole cost and expense, by attorneys of its own election. In the event that grantee refuses the tender of defense in any suit or any claim, said tender having been made pursuant to this section, and said refusal is subsequently determined by a court having jurisdiction (or such other tribunal that the parties agree to decide the matter) to have been a wrongful refusal on the part of grantee, then grantee shall pay all of the city’s costs for defense of the action, including all reasonable expert witness fees, reasonable attorneys’ fees, the reasonable costs of the city, and reasonable attorneys’ fees of recovering under this subsection.

(e)    The obligations of grantee under the indemnification provisions of this section shall apply regardless of whether liability for damages arising out of bodily injury to persons or damages to property were caused or contributed to by the concurrent negligence of the city, its officers, agents, employees or contractors. The provisions of this section, however, are not to be construed to require the grantee to hold harmless, defend, or indemnify the city as to any claim, demand, suit, or action which arises out of the sole negligence or willful misconduct of the city, its agents, officers, employees, volunteers, or assigns. In the event that a court of competent jurisdiction determines that a franchise or other agreement to use the right-of-way is subject to the provisions of RCW 4.24.115, the parties agree that the indemnity provisions hereunder shall be deemed amended to provide that the grantee’s obligation to indemnify the city hereunder shall extend only to the extent of grantee’s negligence.

(f)    Notwithstanding any other provisions of this section, grantee assumes the risk of damage to its facilities located in the rights-of-way from activities conducted by the city, its officers, agents, employees and contractors, except to the extent any such damage or destruction is caused by or arises from the sole negligence or willful or malicious action on the part of the city, its officers, agents, employees or contractors. Grantee releases and waives any and all such claims against the city, its officers, agents, employees and contractors. In no event shall the city be responsible for indirect, special, consequential, or punitive damages or losses, including but not limited to lost income or business interruption, whether or not a party has been advised of the possibility of such damage and notwithstanding the theory of liability in which an action may be brought. Grantee further agrees to indemnify, hold harmless and defend the city against any claims for damages, including, but not limited to, business interruption damages and lost profits, brought by or under users of grantee’s facilities as the result of any interruption of service due to damage or destruction of grantee’s facilities caused by or arising out of activities conducted by the city, its officers, agents, employees or contractors, except to the extent any such damage or destruction is caused by or arises from the sole negligence or any willful misconduct on the part of the city, its officers, agents, employees, or contractors.

(2)    These indemnification obligations shall survive expiration, revocation, termination, or completion of the activities authorized by the franchise or other agreement to use the right-of-way. (Ord. 4891 § 1, 2024; Ord. 4853 § 2, 2023)

26.40.040 Security fund.

(1)    The city may require that each grantee establish a permanent security fund with the city by depositing the amount of at least fifty thousand dollars or other amount as determined by the director with the city in cash or other instrument acceptable to the city (the “security fund”), which fund shall be maintained at the sole expense of the grantee so long as any of the grantee’s facilities are located within the rights-of-way. This security fund shall be separate and distinct from any other bond or deposit required under other code provisions or agreements.

(2)    The grantee shall deposit the security fund with the city on or before the effective date of its franchise, or, if the grantee does not have a franchise, on or before the date the grantee places its facilities in the rights-of-way.

(3)    The security fund shall serve as security for the full and complete performance of the grantee’s obligations under this title and under any agreement between the grantee and the city, including any costs, expenses, damages or loss the city pays or incurs because of any failure attributable to the grantee to comply with the codes, ordinances, rules, regulations or permits of the city.

(4)    Before any sums are withdrawn from the security fund, the director shall give written notice to the grantee:

(a)    Describing the act, default or failure to be remedied, or the damages, cost or expenses which the city has incurred by reason of the grantee’s act or default.

(b)    Providing a reasonable opportunity for the grantee to remedy the existing or ongoing default or failure, if applicable.

(c)    Providing a reasonable opportunity for the grantee to pay any moneys due the city before the city withdraws the amount thereof from the security fund, if applicable.

(d)    Stating that the grantee will be given an opportunity to review the act, default or failure described in the notice with the city manager.

(5)    The grantee shall replenish the security fund within fourteen days after written notice from the city that the city has withdrawn an amount from the security fund. In the event that a grantee notifies the city that it no longer has wireless facilities on city-owned property, the balance of the fund shall be refunded to the grantee within thirty business days of said notice. (Ord. 4891 § 1, 2024; Ord. 4853 § 2, 2023)

26.40.050 Construction bond.

Grantee shall comply with the right-of-way work permit requirements of Title 19. (Ord. 4891 § 1, 2024; Ord. 4853 § 2, 2023)

26.40.060 Work of contractors and subcontractors.

The contractors and subcontractors of a grantee shall be licensed and bonded in accordance with the city’s generally applicable regulations. Work by contractors and subcontractors is subject to the same restrictions, limitations and conditions as if the work were performed by the grantee itself. The grantee shall be responsible for all work performed by its contractors and subcontractors and others performing work on its behalf as if the work were performed by it, and it shall ensure that all such work is performed in compliance with this title and other applicable laws. The grantee shall be jointly and severally liable for all damage, and for correcting all damage, caused by its contractors or subcontractors. It is the responsibility of the grantee to ensure that contractors, subcontractors or other persons performing work on the grantee’s behalf are familiar with the requirements of this title and other applicable laws governing the work they perform. (Ord. 4891 § 1, 2024; Ord. 4853 § 2, 2023)