Professional partnerships must insure or set aside funds for claims

A registered professional partnership must carry qualifying insurance or provide designated funds for certain judgments. This applies to registered limited liability partnerships that perform professional services. Insurance is required only if reasonably available and must cover the kinds of negligence, wrongful acts, or misconduct for which partner liability is limited. Instead of insurance, the partnership may provide $500,000 in designated funds through specified deposits, a bank letter of credit, or insurance company bonds; qualifying insurance or funds maintained under another jurisdiction's rules also count if the amount is sufficient. This requirement took effect upon passage.

The text sets out rules for Rhode Island limited liability companies, including how they form, operate, and change their structure. The provisions address Rhode Island limited liability companies and foreign companies registered to do business in the state. The rules apply to newly formed companies and older companies that choose them before January 1, 2029; they apply to all limited liability companies beginning on that date. Sections 2 and 3 take effect January 1, 2028. Before January 1, 2029, the rules apply to companies formed on or after that effective date and older companies that elect to use them; from January 1, 2029, they apply to all limited liability companies.