Proof of insurance required.

(1) Before any license is issued, except to a category IV dealer in appliances and equipment or a category III liquefied petroleum gas cylinder exchange operator, the applicant must deliver to the department satisfactory evidence that the applicant is covered by a primary policy of bodily injury liability and property damage liability insurance that covers the products and operations with respect to such business and is issued by an insurer authorized to do business in this state for an amount not less than $1 million and that the premium on such insurance is paid. An insurance certificate, affidavit, or other satisfactory evidence of acceptable insurance coverage shall be accepted as proof of insurance. In lieu of an insurance policy, the applicant may deliver a good and sufficient bond in the amount of $1 million, payable to the Commissioner of Agriculture, with the applicant as principal and a surety company authorized to do business in this state as surety. The bond must be conditioned upon the applicant’s compliance with this chapter and the rules of the department with respect to the conduct of such business and shall indemnify and hold harmless all persons from loss or damage by reason of the applicant’s failure to comply. However, the aggregated liability of the surety may not exceed $1 million. If the insurance policy is canceled or otherwise terminated or the bond becomes insufficient, the department may require new proof of insurance or a new bond to be filed, and if the licenseholder fails to comply, the department shall cancel the license issued and give the licenseholder written notice that it is unlawful to engage in business without a license. A new bond is not required as long as the original bond remains sufficient and in force. If the licenseholder’s insurance coverage as required by this subsection is canceled or otherwise terminated, the insurer must notify the department within 30 days after the cancellation or termination.

(2) Before any license is issued to a category III liquefied petroleum gas cylinder exchange operator, the applicant must deliver to the department satisfactory evidence that the applicant is covered by a primary policy of bodily injury liability and property damage liability insurance that covers the products and operations with respect to the business and is issued by an insurer authorized to do business in this state for an amount not less than $300,000 and that the premium on the insurance is paid. An insurance certificate, affidavit, or other satisfactory evidence of acceptable insurance coverage shall be accepted as proof of insurance. In lieu of an insurance policy, the applicant may deliver a good and sufficient bond in the amount of $300,000, payable to the Commissioner of Agriculture, with the applicant as principal and a surety company authorized to do business in this state as surety. The bond must be conditioned upon the applicant’s compliance with this chapter and the rules of the department with respect to the conduct of such business and must indemnify and hold harmless all persons from loss or damage by reason of the applicant’s failure to comply. However, the aggregated liability of the surety may not exceed $300,000. If the insurance policy is canceled or otherwise terminated or the bond becomes insufficient, the department may require new proof of insurance or a new bond to be filed, and if the licenseholder fails to comply, the department shall cancel the license issued and give the licenseholder written notice that it is unlawful to engage in business without a license. A new bond is not required as long as the original bond remains sufficient and in force. If the licenseholder’s insurance coverage required by this subsection is canceled or otherwise terminated, the insurer must notify the department within 30 days after the cancellation or termination.

(3) Any person having a cause of action on the bond may bring suit against the principal and surety, and a copy of such bond duly certified by the department shall be received in evidence in the courts of this state without further proof. The department shall furnish a certified copy of the bond upon payment to it of its lawful fee for making and certifying such copy.