(1) The head of a department of the state of Colorado, with the approval of the governor or, in the case of the county or city and county, the chief executive officer or board of county commissioners, subject to appropriations being available therefor, is hereby authorized to procure insurance, through the department of personnel as provided in the "Procurement Code", articles 101 to 112 of this title 24, for the purpose of insuring its officers, employees, and agents against any liability, other than a liability that may be insured against under the "Workers' Compensation Act of Colorado", articles 40 to 47 of title 8, for injuries or damages resulting from their negligence or other tortious conduct during the course of their service or employment. Counties or cities and counties are authorized to insure their officers, employees, and agents against similar liabilities.

(2) (a) Whenever a person is required by law to provide or purchase a personal surety bond as a condition of serving in a public elected, appointed, or employed position, the public entity for which the person will serve may, in lieu of the required bond, purchase crime insurance to protect the public entity from any dishonesty, theft, or fraud by the person. However, this section does not apply to the bond required of the state treasurer pursuant to section 24-22-101.

(b) If a public entity purchases crime insurance in lieu of a personal surety bond pursuant to this subsection (2), the public official or employee is relieved of all statutory requirements related to the personal surety bond, including requirements as to the type, provider, form, amount, or filing of the personal surety bond. The public entity is likewise relieved of any statutory requirements related to the personal surety bond of the public official or employee.

(c) Crime insurance purchased pursuant to this subsection (2) must be purchased from an insurance provider licensed in the state of Colorado. The public entity shall pay the premiums for the insurance.

(d) As used in this subsection (2), unless the context otherwise requires:

(I) "Crime insurance" means a form of insurance to protect public assets from loss due to dishonesty, theft, or fraud by a public official.

(II) "Personal surety bond" means a bond, surety, surety bond, surety company bond, corporate surety bond, corporate fidelity bond, individual bond, schedule bond, blanket bond, or official bond.

(III) "Public entity" means the state of Colorado, principal departments listed in section 24-1-110, public colleges and universities, state or local commissions, state or local authorities, counties, cities, cities and counties, towns, municipalities, districts, special districts, boards, and school districts.