Code of Colorado Regulations
400 - Department of Natural Resources
402 - Division of Water Resources
2 CCR 402-14 - RULES AND REGULATIONS FOR ADMINISTRATION OF LICENSING, FINANCIAL RESPONSIBILITY, CONTINUING EDUCATION AND REMEDIAL ACTION FOR WELL CONSTRUCTION AND PUMP INSTALLATION CONTRACTORS
7 - Financial Responsibility

Universal Citation: 2 CO Code Regs 402-14 § 7

Current through Register Vol. 47, No. 17, September 10, 2024

7.1 Evidence of Financial Responsibility Required- Prior to the initial issuance or renewal of any license, the applicant or licensee must file with the Board, on a form provided by the Board, evidence of financial responsibility by means of a corporate surety bond or alternative funds as provided for by section 37-91-107. The license automatically lapses if the bond is cancelled or terminated, or if the alternative funds are less than the required amount.

7.2 Corporate Surety Bonds- The bond must specifically cover the licensee's compliance with applicable laws and regulations governing the activities for which the individual is licensed. The bond and any subsequent renewal certificate must specifically identify the individual covered by that bond and also state the type of license or licenses held by the individual.

7.2.1 Each licensee must file and maintain with the Board evidence of financial responsibility, in the form of a savings account, deposit, or certificate of deposit, in the amount of twenty thousand dollars ($20,000), meeting the requirements of section 11-35-101, C.R.S. (2017), or an irrevocable letter of credit for the amount of twenty thousand dollars ($20,000), meeting the requirements of section 11-35-101.5, C.R.S. (2017), or must file and maintain with the Board an approved compliance bond with a corporate surety authorized to do business in the state of Colorado, in the amount of twenty thousand dollars ($20,000), for the use and benefit of any person or the state of Colorado suffering loss or damage, conditioned that such licensee will comply with the laws of the state of Colorado in engaging in the business for which he or she receives a license and the rules of the Board promulgated in the regulation of such business.

7.2.3 A claim against a corporate surety bond must be made in writing to the issuer of the bond, and a copy of the claim must be submitted to the Board.

7.2.4 The licensee must notify the Board of any change in the amount or status of a bond. The licensee must notify the Board of any cancellation or change at least thirty (30) days prior to the effective date of such cancellation or change.

7.3 Alternative Funds- The requirement for financial responsibility may be satisfied by a savings account, deposit, or a certificate of deposit or an irrevocable letter of credit meeting the requirements of sections 11-35-101.5 and 37-91-107. Irrevocable letters of credit must be completed on a form available from the Board. The name and types of licenses held by the individual under the alternative funds must be provided to the Board when first submitted and thereafter with the application for license renewal. These funds must specifically cover the licensee's compliance with applicable laws and regulations governing the activities for which the individual is licensed.

7.3.1 Alternative funds must be assigned to the Board for the use of any person or the State of Colorado suffering loss or damage, consistent with proper findings of the Board.

7.3.2 The licensee is responsible for paying all costs incurred from the maintenance or administration of alternative funds. Any costs incurred by the Board from the payment of claims, negotiation or litigation of claims, and court action taken in connection with such funds must be paid by the licensee. These costs may be taken from the fund if sufficient funds remain after satisfying claims. Otherwise, the Board may take other action to collect these costs.

7.3.3 A claim against an alternative fund must be initiated by certified mail to the contractor and by filing a copy with the Board. The Board will not make payments from or release the alternative fund until it receives either a written and notarized agreement between the parties resolving the claim or a court order directing the Board to make a payment from the fund.

7.4 Period of Liability- The period of liability of a bond is two (2) years after the submission of the last accepted work report. The period of liability for alternative funds provided as evidence of financial responsibility is two (2) years after the expiration, surrender, revocation, or suspension of the license. In the event the alternative funds are replaced by a bond, the period of liability, during which time the alternative funds will be held by the Board, will be two (2) years from the date the new form of financial responsibility becomes effective.

7.4.1 When there is an outstanding claim, the bond or alternative funds must not be released until such claim is finally resolved. Notwithstanding the two-year liability period for alternative funds, when there is a claim initiated, but not resolved, prior to the end of the two-year period, the Board will hold the alternative funds until such claim is resolved.

Disclaimer: These regulations may not be the most recent version. Colorado may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.

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