Article 7. Insurance And Indemnity Bonds of California Water Code >> Division 6. >> Part 3. >> Chapter 9. >> Article 7.

When any of the works authorized by this part are being constructed by the department, the department may carry or cause to be carried such an amount of insurance or indemnity bonds as protection against loss or damage as the department deems proper.

The department may carry insurance to cover any accident or destruction in part or in whole to any works until all bonds and interest thereon have been fully redeemed and paid.

All money collected on any indemnity bond or insurance policy as the result of any damage or injury to any works shall be used for the purpose of repairing or rebuilding the works, as long as there are bonds outstanding.

The department may carry insurance or indemnity bonds insuring against the loss of revenues to be derived from the project by reason of any interruption in the use of the project, or any part thereof, from any cause whatever, and the proceeds of such insurance or indemnity bonds shall be paid into the fund into which the revenues are required to be paid and shall be applied to the same purposes and in the same manner as other moneys in the fund.

Insurance or indemnity bonds against loss of revenues may be in an amount equal to the probable revenues to be received from the use and operation of the project during any period of time that is determined upon and fixed by the department, and shall be paid for out of the revenue fund.

The department may provide in the proceedings authorizing the issuance of bonds for the carrying of insurance as authorized by this part, and the purchase and carrying of such insurance shall thereupon be obligatory upon the department and be paid for out of the revenue fund.