2 minutes
Recommended minimum insurance limits for credit unions of various asset sizes
How much insurance coverage is enough is a question most insurance people are reluctant to answer. But I’m not afraid. I think this is what my clients need to hear from me. First, there is a minimum coverage everyone needs. Then compare the value you place on higher limits of coverage to the premiums charged. The ultimate decision on how much insurance to buy is determined by your perception of the value of the coverage.
Start with your asset size, and use the tables at the bottom of this article to define a starting point for minimums of various types of coverage. Get proposals from your agent for higher limits and see if the additional coverage is worth the cost.
No simple guide can tell you the coverage concerns and problems that are within your insurance. What exclusions are there? What definitions are inadequate? What endorsements should be added? Can your insurer cancel the policy mid-term?
Scott Simmonds, CPCU, ARM, offers fee-only insurance assurance consulting—consulting on, but never selling, insurance. Reach him at 207.284.0085 or Scott@ScottSimmonds.com.
| Executive Risk | <$150M | $151M to $300M | $301M to $5000M | $501M to $1B | $1B to $3B |
| Directors and Officers | $3M | $4M | $5M | $7M | $10M |
| Lender | 2M | 2M | 3M | 4M | 5M |
| Employment Practices | 2M | 2M | 2M | 3M | 3M |
| Internet/Cyber Banking | 2M | 2M | 2M | 3M | 3M |
| Privacy Mitigation | 500K | 500K | 500K | 1M | 1M |
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| Fraud-Bond | <$150M | $151M to $300M | $301M to $5000M | $501M to $1B | $1B to $3B |
| Fidelity/Employee Dishonesty | 3M | 3M | 5M | 8M | 10M |
| Computer Systems Fraud | 3M | 3M | 5M | 8M | 10M |
| Standard Lines | <$150M | $151M to $300M | $301M to $5000M | $501M to $1B | $1B to $3B |
| General Liability | 1M | 1M | 1M | 1M | 1M |
| Automobile Liability | 1M | 1M | 1M | 1M | 1M |
| Umbrella Liability | 5M | 5M | 10M | 15M | 20M |
Photo credit: Dollarphotoclub.com/tang90246
