(a) A registered limited liability partnership, and any foreign limited liability partnership transacting business in this state, shall carry at all times at least $1 million of liability insurance of a kind that is designed to cover the kinds of omissions, negligence, wrongful acts, misconduct and malpractice for which liability is limited by subsection (c), section six, article three of this chapter and which insures the partnership and its partners.

Terms Used In West Virginia Code 47B-10-5

  • Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
  • Contract: A legal written agreement that becomes binding when signed.
  • 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.
  • 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.
  • Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
  • State: when applied to a part of the United States and not restricted by the context, includes the District of Columbia and the several territories, and the words "United States" also include the said district and territories. See West Virginia Code 2-2-10

(b) If, in any proceeding, compliance by a partnership with the requirements of subsection (a) of this section is disputed, that issue shall be determined by the court, and the burden of proof of compliance shall be on the person who claims the limitation of liability in subsection (c), section six, article three of this chapter.

(c) If a registered limited liability partnership 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 obligation or damages in question.

(d) A registered limited liability partnership is considered to be in compliance with subsection (a) of this section if the partnership provides $1 million of funds specifically designated and segregated for the satisfaction of judgments against the partnership or its partners based on the kinds of omissions, negligence, wrongful acts, misconduct and malpractice for which liability is limited by subsection (c), section six, article three of this chapter, by:

(1) Deposit in trust or in bank escrow of cash, bank certificates of deposit or United States Treasury obligations; or

(2) A bank letter of credit or insurance company bond.

(e) Any policy or contract of liability insurance providing coverage for liability as described in this section shall be read so as to contain a provision or endorsement whereby the company issuing such policy waives or agrees not to assert as a defense on behalf of the policyholder or any beneficiary thereof, to any claim covered by the terms of such policy within the policy limits, the immunity from liability of the insured granted by the provisions of this chapter.