To excel in today's competitive environment, boards must be willing to make bold decisions. However, bold decisions can be risky, particularly for directors worried about protecting their personal assets. Directors should feel comfortable being decisive without the threat of litigation hanging over their heads.

Most credit unions offer group liability insurance to their directors and officers to protect them from civil liabilities. In addition, many credit unions have indemnification provisions in their policies. These are good tools. Unfortunately, under certain situations, these practices may not be enough.

When directors and officers are no longer in office, group liability insurance and indemnifications policies may fail to protect them. Under a change-of-control situation, the liability insurance may be cancelled for outgoing directors. A change of control can occur with a merger, regulatory action or removal of the directors by the members. This is important because in many states, a director's liability for decisions could extend up to a statute of limitations.

Complete your profile to continue reading and get FREE access to, part of your ALM digital membership.

  • Critical information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including and

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.