Cal. Water Code § 11853

The department may carry insurance or indemnity bonds insuring against the loss of revenues to be derived from the project by reason of any interruption in the use of the project, or any part thereof, from any cause whatever, and the proceeds of such insurance or indemnity bonds shall be paid into the fund into which the revenues are required to be paid and shall be applied to the same purposes and in the same manner as other moneys in the fund.