(1)Any provision of law to the
contrary notwithstanding, no entity or person who owns, controls, or operates a
water storage reservoir shall be held liable for any personal injury or property
damage resulting from water escaping from that reservoir by overflow or as a result
of the failure or partial failure of the structure or structures forming that reservoir
unless such failure or partial failure has been proximately caused by the negligence
of that entity or person. No entity or person shall be required to pay punitive or
exemplary damages for such negligence in excess of that provided by law. Any
previous rule of law imposing absolute or strict liability on such an entity or person
is hereby repealed.
(2)No such entity or person shall be liable for allowing the inflow to s
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(1) Any provision of law to the
contrary notwithstanding, no entity or person who owns, controls, or operates a
water storage reservoir shall be held liable for any personal injury or property
damage resulting from water escaping from that reservoir by overflow or as a result
of the failure or partial failure of the structure or structures forming that reservoir
unless such failure or partial failure has been proximately caused by the negligence
of that entity or person. No entity or person shall be required to pay punitive or
exemplary damages for such negligence in excess of that provided by law. Any
previous rule of law imposing absolute or strict liability on such an entity or person
is hereby repealed.
(2) No such entity or person shall be liable for allowing the inflow to such
reservoir to pass through it into the natural stream below such reservoir.
(3) (a) No stockholder, officer, or member of a board of directors of an owner
of a reservoir shall be liable for any personal injury or property damage resulting
from water escaping from such reservoir or as a result of the failure or partial
failure of the structure or structures forming such reservoir for which the owner
shall have been found liable if a valid liability insurance policy, or adequate
substitute as provided in paragraph (b) of this subsection (3), has been purchased
by the owner of the reservoir and is in effect at the time such damage occurs. Such
insurance policy shall insure against such damages and provide coverage in an
amount of not less than fifty thousand dollars for each claim and in an aggregate
amount of not less than five hundred thousand dollars for all claims which arise out
of any one incident. The policy may provide that it does not apply to any act or
omission of a stockholder, officer, or member of a board of directors of an owner if
such act or omission is dishonest, fraudulent, malicious, or criminal. The policy may
also contain other reasonable provisions with respect to policy periods, territory,
claims, conditions, and other matters common to such policies of insurance. The
limitation of liability pursuant to this paragraph (a) shall not apply to any criminal,
fraudulent, or malicious act or omission by a member of the board of directors of
the owner, an officer of the owner, or a stockholder of the owner, nor shall it apply
to any ultra vires act of the owner or of a member of the board of directors, an
officer, or a stockholder of such owner. The provisions of this paragraph (a) shall
not be deemed to impose any liability upon a member of the board of directors, an
officer, or a stockholder of the owner of a reservoir beyond that provided in section
7-42-118, C.R.S.
(b) An adequate substitute for such insurance may be in the form of:
(I) A good and sufficient bond, in an amount equal to such recovery
limitations duly executed by a qualified corporate surety approved by the
commissioner of insurance, conditioned upon the payment by the entity or person
who owns, controls, or operates a water storage reservoir of any valid and final
judgment for damages imposed within the judgment limitations established in this
subsection (3);
(II) A good and sufficient escrow of acceptable securities, as defined in
section 24-91-102, C.R.S., or an annual irrevocable letter or annual letters of credit
issued by any national or state bank or any bank for cooperatives as chartered
under Title III of the federal Farm Credit Act of 1971, as amended, and deposited
with an escrow agent pursuant to an escrow contract or agreement requiring the
escrow agent to pay from the escrow account amounts necessary to discharge a
valid and final judgment for damages within the limits established in this subsection
(3). Such escrow contract or agreement shall provide that it cannot be revoked or
amended until after any claims for damage against such entity or person have been
discharged or until applicable statutes of limitations pertaining thereto have
expired.
(III) A combination of insurance and any of the substitutes described in this
paragraph (b).