Newport Beach announced Friday that it has reached a settlement of almost $1 million with three former police officers who alleged that a corrupt, retaliatory police department unfairly passed them over for promotions.

In a 2011 lawsuit, former police lieutenants Craig Frizzell and Steve Shulman sued the Newport Beach Police Department and city. They blamed former police chiefs Bob McDonnell and John Klein and former City Manager Homer Bludau for allegedly passing them over for promotions by using tests designed to favor certain candidates.

Last year, former Officer Robert Morton filed his own lawsuit alleging that he was demoted to the patrol division after he complained about promotion practices involving the two former chiefs and city manager.

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The three officers worked at the department during the same time period.

Frizzell and Shulman will receive $425,000 each from the settlement; Morton will be paid $100,000, according to Newport Beach City Atty. Aaron Harp.

Newport Beach will pay $350,000 of the settlement, and its insurance company will cover the remaining $600,000, according to a news release.

The city also spent about $650,000 defending the lawsuits up until the settlement was reached, though that bill could have reached $1 million before the trial even began, according to the city attorney.

Newport still denies the three former officers' claims. It was the city's insurance company that made the decision to pay out the settlements because it was the cheapest option, Harp said.

"We understand the business decision made by our excess insurance carrier, given they are paying two-thirds of the proposed settlement," he said in a prepared statement.

The insurance carrier decided to settle the two lawsuits together because they both arose from the same facts and circumstances, according to Harp.

"It was basically one claim for insurance purposes," he said.

Allegations of favoritism and unfair practices at the NBPD date back to the 1990s when a four women alleged they faced sexism at the department.

In 2009, former NBPD Sgt. Neil Harvey won more than $1 million in a lawsuit alleging he was passed over for promotions because of rumors he was gay.

Three other lawsuits alleging unfair practices are pending against the department.

Christine Hougan, a former dispatcher, claims she was sexually harassed, discriminated against and fired in retaliation.

In 2012, her husband, John Hougan, claimed in a lawsuit that he was investigated and demoted after testifying on behalf of Harvey.

Last year, a former parking control officer name Zachary McEligot claimed he was wrongfully fired after revealing allegations that officers were taking thousands of dollars of freebies from the Island Hotel in Newport.