SECTION 158:30-5-2. Insurance and bond requirements

(a)   Unless as otherwise provided in (b) of this Section: Each active plumbing contractor must maintain a five thousand dollar ($5,000.00) corporate surety bond, payable to the Board on the Board's call upon the bond, and must cause the surety to file a copy of such bond with the Plumbing Licensing Unit.

(b)   An active plumbing contractor may also satisfy the requirements of (a) of this Section by filing with the Plumbing Licensing Unit documentation demonstrating cash funds securely held for bonding purposes equivalent to a corporate surety bond of either the sum of $5,000 cash or a certificate of deposit in the sum of $5,000 so held for bonding purposes and payable to the Board on the Board's call upon the bond.

(c)   Failure to maintain a corporate surety bond in effect shall constitute an inactive contractor status of a bonded plumbing contractor license immediately upon the expiration of such bond.

(d)   A corporate surety bond may be accepted from any surety authorized to do business in the State of Oklahoma. It shall continue in effect until thirty (30) days have elapsed after the Bond and Insurance Unit is notified by the surety of the cancellation of such bond, unless the bond expired on a date certain on its face.

(e)   A bond or other surety filed in accordance with (a) of this Section shall be in lieu of filing a bond with each municipality where the plumbing contractor works, and shall be conditioned upon all the following terms:

(1)   Plumbing contractors shall faithfully and properly conduct business in compliance with applicable statutes, rules of the Oklahoma Construction Industries Board, and with all the applicable ordinances of the municipality in which plumbing work is performed.

(2)   Plumbing contractors shall pay all fines and penalties imposed by penalty orders of the Board and fines and penalties imposed by courts of competent jurisdiction for the violation of municipal ordinances. The Board may seek payment through the surety bond of any fines or penalties, which the licensee fails to pay.

(3)   In lieu of a corporate surety, an active plumbing contractor may deposit with the Bonds and Insurance Unit the required amount in lawful money or negotiable bonds of the United States, accompanied by a written instrument, to be approved by the Construction Industries Board, executed and acknowledged by the active plumbing contractor, and setting forth the conditions upon which the deposit is made. When the true owner is other than the active plumbing contractor making the deposit, the instrument shall so state and shall also be executed and acknowledged by the true owner. Upon exoneration, the instrument and deposit may be returned by the Bonds and Insurance Unit to the depositor or the true owner, if the depositor is other than the named true owner, after application of the deposit to claims made pursuant to this Section.

(4)   Notwithstanding any provision of a security instrument to the contrary, every surety or depositor of security subjects himself or herself to the jurisdiction of the Construction Industries Board and irrevocably appoints the Administrator as his or her agent upon whom any papers affecting his or her liability may be served. Every surety or depositor of security consents to his or her liability being joint and several. Consequently, judgment may be entered against the surety, or depositor of security, in accordance with his or her obligation simultaneously with judgment against the principal, and execution may thereupon issue.

(5)   Plumbing contractors shall protect, save harmless and indemnify the State and municipalities against any liability imposed by law against the State and municipalities for the negligence of said contractor arising from any act or omission while engaged in work pursuant to the Plumbing License Law.

(6)   Any aggrieved person may bring an action upon the bond for the recovery of penalty thereof to the same extent and with equal rights as though such aggrieved person had been named as the obligee in the bond.

(7)   For purposes of this Section, the term plumbing contractor also includes the agents, servants, and employees of a plumbing contractor.

(f)   Exceptions. The bond and insurance requirement will be waived if:

(1)   The plumbing contractor wishes to be inactive. A contractor may choose to place his or her license on inactive status and may practice as a journeyman but shall not practice as an active contractor. The inactive contractor can obtain an active license at any time if his or her license is valid and the bond and insurance requirements are met; or

(2)   The plumbing contractor is employed by a corporation, partnership, public entity, or political subdivision and said corporation, partnership, public entity or political subdivision submits an affidavit on behalf of the contractor that the employee will only perform plumbing work on property owned by said corporation, partnership, public entity, or political subdivision and the employer assumes all financial responsibility in lieu of the contractor providing bond and insurance. The affidavit must include a statement by the employer that the Board will be notified if the contractor is no longer employed by said employer, or if the employer no longer wishes to assume financial responsibility for the contractor.

(g)   Insurance. A plumbing contractor shall provide proof of financial responsibility by providing a certificate of insurance, which indicates a minimum general liability policy of $50,000. The Construction Industries Board must be notified in the event such liability policy is cancelled for any reason or expires for non-payment of premiums. Plumbing contractors are to add the Construction Industries Board to the certificate as a certificate holder but not as an additional insured and with no additional cost to ensure required notification.

(h)   Failure to provide the complete information with current bond and insurance certificate or failure to maintain bond and insurance will result in an inactive plumbing contractor's license being temporarily issued until such time as the requirements are met.

[Source: Added at 19 Ok Reg 721, eff 1-22-02 (emergency); Added at 19 Ok Reg 1264, eff 5-28-02; Amended at 21 Ok Reg 491, eff 11-14-03 (emergency); Amended at 21 Ok Reg 761, eff 4-26-04; Amended at 22 Ok Reg 1059, eff 5-26-05; Amended at 25 Ok Reg 1856, eff 6-26-08; Amended at 31 Ok Reg 899, eff 9-12-14; Amended at 32 Ok Reg 1616, eff 9-11-15; Amended at 34 Ok Reg 873, eff 10-1-17; Amended at 35 Ok Reg 917, eff 10-1-18; Amended at 36 Ok Reg 1406, eff 10-1-19; Amended at 37 Ok Reg 1048, eff 10-1-20]