Requires certain limited liability partnership providing professional services to carry liability insurance.
Impact
If passed, S2772 will bring significant changes to state laws governing partnerships. It will establish financial responsibility requirements for LLPs, serving to protect consumers by ensuring adequate coverage is in place for professional services. The bill stipulates that if a partnership does not comply with these insurance requirements, the burden of proof lies on the party claiming limited liability; a court would determine compliance during proceedings. Additionally, compliance details are not to be disclosed to a jury, maintaining a level of protection for the partnerships in legal contexts.
Summary
Bill S2772, titled 'An Act Relating to Corporations, Associations and Partnerships — Uniform Partnership Act', proposes to amend the existing Uniform Partnership Act by mandating that registered limited liability partnerships (LLPs) providing professional services must carry liability insurance. This insurance must cover potential negligence, wrongful acts, or misconduct and is calculated based on the number of professional employees within the partnership, setting a minimum coverage of $100,000 and a maximum of $500,000 based on specific conditions outlined in the bill. The intent behind the bill is to ensure that professional services partnerships are financially accountable and can provide compensation for any potential claims against them.
Conclusion
Overall, S2772 aims to enhance the regulatory framework surrounding partnerships in Rhode Island, particularly in relation to professional services. The success of this legislation may depend on balancing consumer protection with the operational realities faced by small businesses, prompting ongoing discussions within the legislative assembly as it moves toward passage.
Contention
Discussions surrounding S2772 have highlighted potential points of contention, particularly regarding the implications for small partnerships and the accessibility of the required insurance. Critics may argue that such mandates could place undue financial strain on smaller firms, potentially limiting competition in the professional services market. Proponents argue that the law is necessary to safeguard consumer interests, asserting that ensuring sufficient insurance will enhance accountability among service providers.
An Act To Amend Title 6 Of The Delaware Code Relating To The Creation, Regulation, Operation, And Dissolution Of Domestic Limited Partnerships And The Registration And Regulation Of Foreign Limited Partnerships.
An Act To Amend Title 6 Of The Delaware Code Relating To The Creation, Regulation, Operation, And Dissolution Of Domestic Partnerships And The Registration And Regulation Of Foreign Limited Liability Partnerships.