Professional service providers; requirement for professional liability insurance.

Except for any person or firm providing professional services of a research or training nature, any person or firm rendering legal, architectural, engineering, or other professional services to the department shall have and maintain during the period the services are rendered a professional liability insurance policy or policies with a company or companies authorized to do business in the state affording professional liability coverage for the professional services rendered, in an amount deemed sufficient by the department. The requirement for professional liability insurance set forth in this section may be waived by the department, if the person or firm providing professional services obtains and maintains an unexpired, irrevocable letter of credit, established pursuant to chapter 675, in an amount not less than the minimum insurance coverage required by the contract with the department. The letter of credit shall be solely for the benefit of the department and must remain valid until 3 years after final acceptance of the project of which the professional services were a part. The letter of credit shall be approved by the department comptroller and be payable to the department as beneficiary upon presentment of a final judgment indicating liability and awarding damages to be paid to the department by the professional service provider or upon presentment of a settlement agreement signed by all parties. The letter of credit shall be nonassignable and nontransferable. The letter of credit shall be issued by any bank or savings association organized and existing under the laws of this state or any bank or savings association organized under the laws of the United States that has its principal place of business in this state or has a branch office which is authorized under the laws of this state or of the United States to receive deposits in this state.