§ 7-5.1-8 - Insurance required.

SECTION 7-5.1-8

   § 7-5.1-8  Insurance required. – (a) Every professional service corporation shall maintain insurance against anyliability imposed by law upon the corporation or its employees arising out ofthe performance of professional services, excluding liability for claimsbrought about or contributed to by the dishonest, fraudulent, criminal, ormalicious acts or omissions of any employee. The insurance shall be maintainedin a company lawfully authorized to write insurance in this state and shall be,with respect to each claim, in the aggregate amount of fifty thousand dollars($50,000) multiplied by the number of professional employees of the corporationas of the policy anniversary date. However, in no case is the coverage to beless than one hundred thousand dollars ($100,000). Not more than five hundredthousand dollars ($500,000) coverage is to be required of any corporation. Anypolicy for insurance coverage may include a deductible provision in an amountnot to exceed twenty-five thousand dollars ($25,000) for each claim multipliedby the number of professional employees of the corporation as of the date ofthe issuance of the policy.

   (b) Every insurance company shall furnish to theincorporators of each corporation to be insured by it a certificate recitingthat application for the insurance has been duly made and that a policy ofinsurance as required will be issued, the amount of coverage to be provided,and the expiration date of the policy. The incorporators shall file thecertificate in the office of the secretary of state at the time of filing thearticles of association, and the secretary of state shall not certify thearticles of association unless the certificate of insurance has been filed.Subsequently, every insurer shall notify the secretary of state and the insuredof the termination of the insurance not more than thirty (30) days nor lessthan ten (10) days before the effective date of the termination. Upon receiptof the notice, the secretary of state shall inform the appropriate regulatoryagency of the notice.