§ 7-16-3.3 - Insurance or financial responsibility of limited liability company.
SECTION 7-16-3.3
§ 7-16-3.3 Insurance or financialresponsibility of limited liability company. – (a) A limited liability company that is to perform professional services, asdefined in § 7-5.1-2, shall carry, if reasonably available, liabilityinsurance of a kind that is designed to cover the kinds of negligence, wrongfulacts or misconduct for which liability is limited by § 7-16-3.2. Theinsurance shall be in the aggregate amount of fifty thousand dollars ($50,000)multiplied by the number of professional employees of the limited liabilitycompany as of the policy anniversary date; provided, however, that in no caseshall the coverage be less than one hundred thousand dollars ($100,000) but inno event shall the necessary coverage exceed a maximum of five hundred thousanddollars ($500,000); provided further, however, that any policy for insurancecoverage may include a deductible provision in any amount not to exceedtwenty-five thousand dollars ($25,000) for each claim multiplied by the numberof professional employees of the limited liability company as of the date ofthe issuance of the policy. The policy or policies of insurance may be subjectto any terms, conditions, exclusions and endorsements that are typicallycontained in policies of this type.
(b) If, in any proceeding, compliance by a limited liabilitycompany 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 personwho claims the limitation of liability in § 7-16-3.2.
(c) If a limited liability company is in compliance with therequirements of subsection (a) of this section, the requirements of thissection shall not be admissible or in any way be made known to a jury indetermining an issue of liability for or extent of the debt or obligation ordamages in question.
(d) Insurance is reasonably available for the purpose ofsubsection (a) of this section if, at the time that the coverage would apply tothe negligence, wrongful acts or misconduct in question, it was reasonablyavailable to similar types of limited liability companies through the admittedor eligible surplus lines market.
(e) A limited liability company is considered to be incompliance with subsection (a) of this section if the limited liability companyprovides five hundred thousand dollars ($500,000) of funds specificallydesignated and segregated for the satisfaction of judgments against the limitedliability company based on the forms of negligence, wrongful acts andmisconduct for which liability is limited by § 7-16-3.2 by:
(1) Deposit in trust or in bank escrow of cash, bankcertificate 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 maintainsliability insurance or segregated funds pursuant to the laws or regulations ofanother jurisdiction, the liability insurance or segregated funds shall bedeemed to satisfy this section if the amount of them is equal to or greaterthan the amount specified in subsection (a) or subsection (e) of this section.