2006 Code of Virginia § 46.2-2011.9 - Bond and letter of credit requirements

46.2-2011.9. Bond and letter of credit requirements.

A. Every applicant for an original, second-year renewal, and third-yearrenewal of a certificate under this chapter shall obtain and file with theDepartment a surety bond or an irrevocable letter of credit, in addition toany other bond or letter of credit required by law, in the amount of $25,000.The bond or letter of credit shall be in a form and content acceptable to theDepartment. The bond or letter of credit shall be conditioned on a statementby the applicant that the applicant will not practice fraud, make anyfraudulent representation, or violate any provision of this chapter in theconduct of the applicant's business. The Department may, without holding ahearing, suspend the certificate during the period that the certificateholder does not have a sufficient bond or letter of credit on file.

B. Every applicant for an original and subsequent renewal license pursuant tothis chapter shall obtain and file with the Department a surety bond or anirrevocable letter of credit, in addition to any other bond or letter ofcredit required by law, in the amount of $25,000. The bond or letter ofcredit shall be in a form and content acceptable to the Department. The bondor letter of credit shall be conditioned on a statement by the applicant thatthe applicant will not practice fraud, make any fraudulent representation, orviolate any provision of this chapter in the conduct of the applicant'sbusiness. The Department may, without holding a hearing, suspend the licenseduring the period that the licensee does not have a sufficient bond or letterof credit on file.

C. If a person suffers any of the following: (i) loss or damage in connectionwith the transportation service by reason of fraud practiced on him orfraudulent representation made to him by a licensee or certificate holder orhis agent or employee acting within the scope of employment; (ii) loss ordamage by reason of a violation by a licensee or certificate holder or hisagent or employee of any provision of this chapter in connection with thetransportation service; or (iii) loss or damage resulting from a breach of acontract entered into on or after the effective date of this act, that personshall have a claim against the licensee or certificate holder's bond orletter of credit, and may recover from such bond or letter of credit theamount awarded to such person by final judgment of a court of competentjurisdiction against the licensee or certificate holder as a result of suchloss or damage up to, but not exceeding, the amount of the bond or letter ofcredit.

D. The licensee or certificate holder's surety shall notify the Departmentwhen a claim is made against a licensee or certificate holder's bond, when aclaim is paid and when the bond is canceled. Such notification shall includethe amount of a claim and the circumstances surrounding the claim.Notification of cancellation shall include the effective date and reason forcancellation.

E. The surety on any bond filed by a licensee or certificate holder shall bereleased and discharged from all liability accruing on such bond after theexpiration of sixty days from the date on which the surety files with theDepartment a written request to be released and discharged. Such requestshall not operate to relieve, release or discharge the surety from anyliability already accrued or which shall accrue before the expiration of thesixty-day period.

(2001, c. 596.)

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