Section 7520.3 - [Effective until 1/1/2025] Limited liability companies; insurance(a)As a condition of the issuance, reinstatement, reactivation, or continued valid use of a license under this chapter, a limited liability company shall, in accordance with this section, maintain a policy or policies of insurance against liability imposed on or against it by law for damages arising out of claims based upon acts, errors, or omissions arising out of the private investigator services it provides.(b)The total aggregate limit of liability under the policy or policies of insurance required under this section shall be as follows: (1)For a limited liability company licensee with five or fewer persons named as members pursuant to subdivision (i) of Section 7525.1, the aggregate limit shall not be less than one million dollars ($1,000,000).(2)For a limited liability company licensee with more than five persons named as members pursuant to subdivision (i) of Section 7525.1, an additional one hundred thousand dollars ($100,000) of insurance shall be obtained for each person named as members of the licensee except that the maximum amount of insurance is not required to exceed five million dollars ($5,000,000) in any one designated period, less amounts paid in defending, settling, or discharging claims as set forth under this section.(c)Prior to the issuance, reinstatement, or reactivation of a limited liability company license as provided under this chapter, the applicant or licensee shall, in the manner prescribed by the bureau, submit the information and documentation required by this section and requested by the bureau, demonstrating compliance with the financial security requirements specified by this section.(d)For any insurance policy secured by a licensee in satisfaction of this section, a Certificate of Liability Insurance, signed by an authorized agent or employee of the insurer, shall be submitted electronically or otherwise to the bureau. The insurer issuing the certificate shall report to the bureau the following information for any policy required under this section: name, license number, policy number, dates that coverage is scheduled to commence and lapse, and cancellation date if applicable. The insurer shall list the bureau as the certificate holder for the purposes of receiving notifications related to the policy's status.(e)(1)If a licensee fails to maintain sufficient insurance as required by this section, or fails to provide proof of the required insurance upon request by the bureau, the license is subject to suspension and shall be automatically suspended pursuant to this subdivision until the date that the licensee provides proof to the bureau of compliance with the insurance coverage requirement.(2)Prior to an automatic suspension, the bureau shall notify the licensee, in writing, that it has 30 days to provide proof to the bureau of having the required insurance or the license shall be automatically suspended.(3)If the licensee fails to provide proof of insurance coverage within this period, the bureau may automatically suspend the license.(f)If the license of a limited liability company is suspended pursuant to subdivision (e), each member of the limited liability company shall be personally liable up to one million dollars ($1,000,000) each for damages resulting to third parties in connection with the company's performance, during the period of suspension, of any act or contract when a license is required by this chapter.(g)A licensee organized as a limited liability company shall report annually to the bureau the date and amount of any claims paid during the prior calendar year from any general liability insurance policy held pursuant to this section. The licensee shall report the information on a form provided by the bureau. The licensee shall report the claim information no later than March 1. The creation of the form shall not be subject to the requirements of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.(h)This section shall remain in effect only until January 1, 2025, and as of that date is repealed.Ca. Bus. and Prof. Code § 7520.3
Amended by Stats 2022 ch 625 (SB 1443),s 22.5, eff. 1/1/2023.Amended by Stats 2022 ch 511 (SB 1495),s 40, eff. 1/1/2023.Amended by Stats 2020 ch 312 (SB 1474),s 80, eff. 1/1/2021.Amended by Stats 2017 ch 569 (SB 559),s 8, eff. 1/1/2018.Amended by Stats 2016 ch 800 (SB 1196),s 10, eff. 1/1/2017.Added by Stats 2014 ch 669 (AB 1608),s 3, eff. 1/1/2015.