This sounds like a quality idea:

So my new idea is this: Require that water monopolies (private and public) purchase insurance against outages, shortages, toxic spills, etc. Such a requirement would produce two good results:

1. Current practices would immediately improve with oversight — solving the free-rider/coordination problem (in principal-agent jargon) of monitoring utilities.
2. Insurance companies would pay for future problems, which reduces the problem with ex-post rate increases to fix them.

This approach would be difficult to apply when the types of events you want to prevents are unknown unknowns, so that it is hard to write regulation for it.