§ 32-226. Bond and insurance required.

(a)

In the event that a permit is issued for a pipeline or other operations under this division, no actual operation shall be commenced until the permittee shall file with the city secretary a bond and a certificate of insurance as follows:

(1)

No person shall begin the construction or operation of any pipeline until he has filed with the city secretary a duly executed bond executed by the applicant as principal with an A.M. Best A-rated surety company that is acceptable to the city and is licensed to conduct business in the state as surety, payable to the city and the policy shall name the city as an additional insured and such surety company shall maintain an A.M. Best A rating for the policy period. The bond shall include conditions that the applicant, his heirs, assigns and successors will do the following:

a.

Comply with the terms and conditions of the application and this division in the construction, operation and maintenance of the pipeline and related structure.

b.

That all streets and sidewalks and all other public places and all public utilities that may be injured or damaged in the operation will be restored to their former condition.

c.

That all litter, machinery, buildings, trash, and waste used, accumulated or allowed in the construction of any pipeline will be removed within 30 days of the completion of the construction.

d.

That all litter, machinery, buildings, trash, and waste used, accumulated or allowed in the operation of any pipeline will be removed within 30 days of the completion of the operations.

e.

Such bond shall be in the sum of $50,000.00 or $10.00 per foot of pipe, whichever is greater, and before the permit shall be issued, the bond shall be approved by the city and filed with the city secretary. Such bond shall become effective upon the granting of the permit and shall remain in full force and effect until all work under the terms of such permit has been completed. Such bond may later be amended to include other pipelines, under provisions of other applications, or other permits.

(2)

In addition to the bond required in subsection (a)(1) of this section, each person desiring to construct a pipeline or to conduct any other work under the provisions of this division shall be required to carry public liability insurance with a carrier rated A or better by A.M. Best in a minimum amount of $1,000,000.00 for one person and $5,000,000.00 for one accident and property damage insurance in the amount of $10,000,000.00 for one accident, which shall remain in full force and effect and be carried so long as such pipeline is operated. A certificate of insurance shall be furnished annually by the permittee or the subsequent owner and operator of such pipeline showing that such insurance is and continues in effect.

(3)

Permittee shall provide and maintain in full force and effect during the term of its permit insurance with the following minimum limits:

a.

Worker's compensation at statutory limits;

b.

Employer's liability, including bodily injury by accident and by disease, for $500,000.00 combined single limit per occurrence and a 12-month aggregate policy limit of $1,000,000.00;

c.

Commercial general liability coverage, including blanket contractual liability, products and completed operations, personal injury, bodily injury, broad form property damage, operations hazard, pollution, explosion, collapse and underground hazards for $5,000,000.00 per occurrence and a 12-month aggregate policy limit of $10,000,000.00; and

d.

Automobile liability insurance (for automobiles used by the permittee in the course of its performance under the permit, including employer's non-ownership and hired auto coverage) for $2,000,000.00 combined single limit per occurrence.

(b)

The city shall adjust the above minimum liability limits every five years during the term of the permit to compensate for the effects of inflation and with the objective to reestablish the value of coverage required as of the effective date of the ordinance from which this division is derived.

(c)

Each policy or an endorsement thereto, except those for worker's compensation and employer's liability, shall name the city and its officers, assigns, employees and agents as additional insured parties, but limited to risks indemnified pursuant to this section. If any such policy is written as claims made coverage and the city is required to be carried as an additional insured, then the permittee shall purchase policy period extensions so as to provide coverage to the city for a period of at least two years after the last date that the permit is in effect. No deductible shall exceed ten percent of the minimum limits of liability or one percent of the consolidated net worth of the permittee and its permitted affiliates, whichever is greater.

(d)

The permittee shall assume and bear any claims or losses to the extent of deductible amounts and waives any claim it may ever have for the same against the city and its officers, assigns, agents or employees in respect of any covered event.

(e)

All such policies and certificates shall contain an agreement that the insurer shall notify the city in writing not less than 30 days before any material change, reduction in coverage or cancellation of any policy. The permittee shall give written notice to the city within five days of the date upon which total claims by any party against the permittee reduce the aggregate amount of coverage below the amounts required by the oil and gas pipeline permit.

(f)

Each policy must contain an endorsement to the effect that the insurer waives any claim or right in the nature of subrogation to recover against the city, its officers, assigns, agents or employees.

(g)

Each policy must contain an endorsement that such policy is primary insurance to any other insurance available to the city as an additional insured with respect to claims arising thereunder.

(Code 1994, § 4.936; Ord. No. 430, § 1, 9-17-2007)