Insurance companies sue to get out of paying for Bertha repairs

Insurance companies have filed a lawsuit to get off the hook for millions of dollars of repair costs for Seattle’s tunnel-boring machine called Bertha.

The Seattle Times reports that the companies filed a lawsuit last week in New York City claiming they shouldn’t have to pay the repair bill because the machine’s design was flawed from the start.

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The suit says the repair costs now exceed the tunnel machine’s original price of $80 million. Repairs are expected to top $143 million.

The news confirms what many have speculated would eventually happen: lawsuits filed over the boring machine and its repairs.

Washington Secretary of Transportation Lynn Peterson previously noted that the state required the contractor to carry $500 million of insurance, and said the state also has insurance tied to the tunnel project. That figure far exceeds the $143 million in repairs cited in the recent lawsuit.

Dr. Patricia Galloway was chair on an expert panel that looked into the stalled project. She cited, in April, a $329 million price tag to cover those costs, which partially relied upon Bertha’s insurance policy, money from a contingency fund, and savings from other parts of the tunnel that were finished early.

If that insurance money is threatened by the lawsuit, it could lead to infighting and further lawsuits that KIRO Radio political analyst Rob McKenna speculated would end in a courtroom.

“Here you have a complicating factor that this joint venture is a consortium of more than one company. So what’s going bankrupt? The consortium, or the individual companies in the consortium?” McKenna said. “It would be a big mess and take years for the state to recover its losses. It will be a mess.”

“Well, we know that one of them is very litigious,” McKenna said. “Which raises the question, ‘Why were they selected?’ The answer is no one else bid on the project. They ended up with Seattle Tunnel Partners as pretty much the sole bidder when everyone else pulled out. So they decided to take a chance. I know they wrote the best contract they could, but took a chance on this particular partnership, even though it includes this company with a history of litigation.”

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The tunnel was designed to replace the Alaskan Way Viaduct, damaged in a 2001 earthquake. But Bertha broke down soon after drilling began.

Repairs to the cutter head were completed and it was lowered back into a repair pit this week. The tunnel contractor says drilling should begin again in November.

The Associated Press contributed to this report.