TITLE 7
Corporations, Associations, and Partnerships

CHAPTER 7-12
Partnerships

SECTION 7-12-58


§ 7-12-58 Insurance or financial responsibility of registered limited liability partnerships.

(a) A registered limited liability partnership that is to perform professional services as defined in § 7-5.1-2 of the general laws 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 § 7-12-26(b). The insurance shall be in the aggregate amount of fifty thousand dollars ($50,000) multiplied by the number of professional employees of the registered limited liability partnership as of the policy anniversary date; provided, 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, 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 partnership 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.

(b) If, in any proceeding, compliance by a partnership with the requirements of subsection (a is disputed:

(1) That issue is determined by the court, and

(2) The burden of proof of compliance is on the person who claims the limitation of liability in § 7-12-26(b).

(c) If a registered limited liability partnership is in compliance with the requirements of subsection (a), 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) 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 partnerships through the admitted or eligible surplus lines market.

(e) A registered limited liability partnership is considered to be in compliance with subsection (a) if the partnership provides five hundred thousand dollars ($500,000) of funds specifically designated and segregated for the satisfaction of judgments against the partnership based on the forms of negligence, wrongful acts and misconduct for which liability is limited by § 7-12-26(2) 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 bonds.

(f) To the extent that a partnership maintains liability insurance or segregated funds pursuant to the laws or regulations of another jurisdiction, the liability insurance or segregated funds are deemed to satisfy this section if the amount hereof is equal to or greater than the amount specified in subsection (a) or (e).

History of Section.
(P.L. 1996, ch. 270, § 2; P.L. 1998, ch. 235, § 1.)