MADISON, Wis.-The financial market meltdown has led to questions about who should be held responsible when things go wrong, so making sure boards and management teams are appropriately covered is another insurance issue CUs are tackling. "Another coverage that is getting a lot of airplay is DNO," Nitschke noted. "That's been getting a lot of scrutiny of late. This is a very challenging regulatory and litigation environment right now, and as a result we are seeing claim trends that support this." For example:
• Directors, Volunteers, and Employees' [DV&E] claim count at CUNA Mutual is up 120% year over year
• Equal Employment Opportunities Commission charges were up 15% in 2008, reaching an all-time record for the government agency
• CUNA Mutual Employment Practices Liability losses were up 30% in 2008
"As we see more regulation, we can expect to see more litigation and more claims," Nitschke said." All of which can add up to more costs, particularly if some CU board members with deeper pockets begin to be concerned about their personal exposure. But there are some ways to ensure board members are covered without breaking the credit union. "Side A coverage should be considered the ultimate backstop for board members," Nitschke explained. "If a credit union had $10 million of DV&E coverage and instead wanted to cut back to $7 million, you can enhance that coverage with Side A, which is a little more affordable."
