Required Insurance and Capital Program

(1) A Licensed Funeral Establishment which engages in the Profession and Business of Embalming and Funeral Directing in Massachusetts shall maintain in good standing professional liability insurance which meets the following minimum standards: (a) The insurance shall cover negligence, wrongful acts, and errors and omissions. (b) The insurance shall be in an amount of at least $50,000, plus the product of $15,000 multiplied by the number of owners and employees of the Licensed Funeral Establishment who are Type 3(s), but does not need to be in excess of $500,000 in the aggregate. (c) The requirements of 239 CMR 3.17(1)(c) shall be considered satisfied if the Licensed Funeral Establishment maintains insurance sufficient to provide coverage at a level of at least $300,000 for each claim with an aggregate top limit of liability for all claims during any one year of at least $1,000,000. (d) Such insurance policies may contain reasonable provisions with respect to policy periods, territory, claims, conditions and other usual matters. (2) A Licensed Funeral Establishment which engages in the Profession and Business of Embalming and Funeral Directing in Massachusetts is not required to maintain the insurance required by 239 CMR 3.17(2) if: (a) that Licensed Funeral Establishment maintains a designated and segregated capital fund equal to the amount of insurance required by 239 CMR 3.17(2); and (b) such funds are specifically designated and segregated for the satisfaction of judgments against the Licensed Funeral Establishment and/or its owners, based on negligence, wrongful acts, or errors and omissions, by means of: 1. Deposit in trust, or in bank escrow, of such funds in the form of cash, bank certificates of deposit, or United States Treasury obligations; or 2. A bank letter of credit or insurance company bond. (3) Upon any cancellation or other interruption in the insurance coverage required by 239 CMR 3.17(3), or any failure to maintain the designated and segregated capital required by 239 CMR 3.17(3) shall immediately cease engaging in the Profession and Business of Embalming and Funeral Directing until such time as the Licensed Funeral Establishment is in compliance with 239 CMR 3.17. (4) A Licensed Funeral Establishment shall notify the Board in writing, within five business days, if the insurance coverage required by this section is cancelled or otherwise interrupted, or if the designated and segregated capital falls below the amount required. Failure to provide such notice to the Board shall subject the Licensed Funeral Establishment and its related Type 3(s), to disciplinary action by the Board pursuant to M.G.L. c. 112, § 84(j). (5) A Licensed Funeral Establishment may be required to provide verification of compliance with this section, satisfactory to the Board, at the time it applies for a new funeral establishment certificate, or at any other time upon request by the Board.