Directors and Officers Insurance for Credit Unions in Illinois

Learn more about our directors and officers insurance for credit unions and get a quote from one of our knowledgeable independent agents. Providing coverage to credit unions across Illinois, Indiana, and other states.

What is directors and officers insurance? 

Leading any business, but especially a credit union that handles lots of funds, comes with certain risks. In some cases, the risk can extend beyond professional reputation and into personal financial liability. Should an Illinois credit union executive be held financially liable for a bad decision or action, directors and officers insurance may provide assistance.

Directors and officers insurance is a form of liability coverage for credit union executives and other business leaders. Leaders may be protected from liability related to a range of bad decisions.

Who in Illinois can benefit from having D&O insurance?

Most business leaders could likely benefit from the protections that D&O insurance affords. This generally includes most C-executives, presidents and board members of Illinois credit unions. While coverage isn’t exclusive to credit unions, it’s a protection that almost everyone in senior leadership at a credit union ought to have.

Of course, executives of other businesses might also want coverage. So too might chairpersons, board members and other leaders of nonprofits.

What kinds of claims are covered under D&O insurance?

D&O policies can offer protection against a variety of poor decisions or actions that executives might take. Depending upon a policy’s terms and conditions, it might cover:

• Misrepresentations or misleading statements
• Violations of The Fair Credit Union Act
• Violations of NCUA regulations
• Decisions resulting in a liquidity crisis
• Mismanagement of funds
• Lack of proper governance

Policies usually exclude claims related to illegal activities or intentional malfeasance.

Are breaches of fiduciary duties covered? 

D&O policies may extend coverage for breaches of fiduciary duties, but it’s important to check a specific policy’s provisions. An insurance agent who specializes in these policies can help find a policy that offers robust protections for fiduciaries.

What are Sides A, B and C in D&O coverage? 

D&O policies may have three different components, termed Side A, Side B, and Side C:

• Side A: Generally for providing personal protection to leaders in cases where the organization fails to offer assistance. Might apply if an organization is bankrupt or insolvent, and unable to cover legal fees.
• Side B: Generally for the organization itself. May pay legal fees and settlements resulting from a leader’s actions, usually including costs incurred while defending the leader against legal claims.
• Side C: Generally for supplying securities coverage. This is most used by publicly traded companies, but might be used by credit unions in select cases.

How much does D&O insurance cost for credit unions? 

Premiums for D&O policies vary, being influenced by factors such as:

• The role of the insured individuals
• The size of the credit union
• The financial health of the credit union
• Chosen coverage limits
• History of previous legal claims or lawsuits 

For tailored quotes, credit unions can talk with an independent insurance agent. An independent agent will be able to compare quotes from several insurers, checking both coverages and rates.

Who pays for credit union executive’s D&O coverage?

Typically, the credit union incurs the cost of D&O insurance premiums. Even though the coverage principally benefits the leaders, the need for such coverage arises from their official roles within the credit union. They wouldn’t need the coverage if not for their position, and so the coverage is usually paid for by the credit union.

Where can Illinois credit unions get directors and officers insurance? 

If you need help finding directors and officers insurance for credit union executives, contact the independent insurance agents at L.A. Blanchette Insurance. We’ve worked with many credit unions in Illinois, and have the expertise necessary to make sure your union’s executives are properly protected.