Rhode Island General Laws 7-16-3.3. Insurance or financial responsibility of limited-liability company
(a) A limited-liability company that is to perform professional services, as defined in § 7-5.1-2, shall carry, if reasonably available, liability insurance of a kind that is designed to cover the kinds of negligence, wrongful acts or misconduct for which liability is limited by § 7-16-3.2. The insurance shall be in the aggregate amount of fifty thousand dollars ($50,000) multiplied by the number of professional employees of the limited-liability company as of the policy anniversary date; provided, however, that in no case shall the coverage be less than one hundred thousand dollars ($100,000) but in no event shall the necessary coverage exceed a maximum of five hundred thousand dollars ($500,000); provided further, however, that any policy for insurance coverage may include a deductible provision in any amount not to exceed twenty-five thousand dollars ($25,000) for each claim multiplied by the number of professional employees of the limited-liability company as of the date of the issuance of the policy. The policy or policies of insurance may be subject to any terms, conditions, exclusions and endorsements that are typically contained in policies of this type.
Terms Used In Rhode Island General Laws 7-16-3.3
- Court: includes every court and judge having jurisdiction in the case. See Rhode Island General Laws 7-16-2
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Person: means a natural person, partnership, limited partnership, domestic or foreign limited-liability company, trust, estate, corporation, non-business corporation or other association. See Rhode Island General Laws 7-16-2
- United States: include the several states and the territories of the United States. See Rhode Island General Laws 43-3-8
(b) If, in any proceeding, compliance by a limited-liability company with the requirements of subsection (a) of this section is disputed:
(1) That issue shall be determined by the court; and
(2) The burden of proof of compliance shall be on the person who claims the limitation of liability in § 7-16-3.2.
(c) If a limited-liability company is in compliance with the requirements of subsection (a) of this section, the requirements of this section shall not be admissible or in any way be made known to a jury in determining an issue of liability for or extent of the debt or obligation or damages in question.
(d) Insurance is reasonably available for the purpose of subsection (a) of this section if, at the time that the coverage would apply to the negligence, wrongful acts or misconduct in question, it was reasonably available to similar types of limited-liability companies through the admitted or eligible surplus lines market.
(e) A limited-liability company is considered to be in compliance with subsection (a) of this section if the limited-liability company provides five hundred thousand dollars ($500,000) of funds specifically designated and segregated for the satisfaction of judgments against the limited-liability company based on the forms of negligence, wrongful acts and misconduct for which liability is limited by § 7-16-3.2 by:
(1) Deposit in trust or in bank escrow of cash, bank certificate of deposit or United States Treasury obligations; or
(2) A bank letter of credit or insurance company bonds.
(f) To the extent that a limited-liability company maintains liability insurance or segregated funds pursuant to the laws or regulations of another jurisdiction, the liability insurance or segregated funds shall be deemed to satisfy this section if the amount of them is equal to or greater than the amount specified in subsection (a) or subsection (e) of this section.
History of Section.
P.L. 2002, ch. 205, § 3.