Title V of the Landrum Griffin Act, also known as the Labor Management Reporting and Disclosure Act (LMRDA) generally provides that it is against public policy to relieve union officers of liability for certain breaches of duty, such as personal profit, fraud, conflict of interest, anti-trust, or racketeering allegations. Thus, labor leaders can be personally responsible for all defense costs. Ullico Casualty Group, LLC's Individual Labor Leader endorsement on the Union Liability policy pays defense costs for allegations like these, subject to the terms, conditions, and exclusions of the policy.
1. Why do union leaders need the individual labor leader (ILL) endorsement?
The Union Liability policy provides two parts of coverage -- the primary policy provides limits of liability up to $5 million and covers the four broad exposures unions and their leaders face, which are: employment practices liability, duty of fair representation, personal injury and financial management of the union.
The second part of coverage is the ILL endorsement. This endorsement provides defense protection for union officials when unions cannot fund the defense for allegations against their leaders of dishonesty or wrongdoing.
2. Who can purchase the ILL endorsement?
Union directors and any representatives of the union, including board and committee members, shop stewards and business agents, plus any employees with spending authority, should consider purchasing this coverage. Please refer to the definition of 'insured person' in the policy form issued. Payments for the ILL endorsement can be made directly to the brokerage firm handling the policy, and they will remit payments to Ullico Casualty Group. We recommend that you review this topic with your legal counsel if you have questions.
3. Why can't the union pay for the ILL endorsement?
The union cannot include this type of individual coverage in its base policy because courts, interpreting the LMRDA, have prohibited unions from funding the defense of these allegations against individual leaders. Therefore, the union leaders electing the ILL endorsement are responsible for paying their own ILL coverage premiums.
4. Can the union or labor leaders purchase the ILL endorsement without purchasing the union liability base policy?
No. ILL coverage can only be purchased as an endorsement to the base Union Liability policy. The base policy provides broad liability coverage for the insured union. The ILL endorsement is additional protection for union leaders, with coverage and limits in addition to, and separate from, the policy's base premium.
5. What is the premium and level of ILL insurance coverage?
Annual premiums range from $50 per labor leader for $50,000 of individual limits to $150 for $250,000 of individual limits.
6. Is there a maximum aggregate amount of ILL coverage per policy?
Yes. Each policy will provide a maximum aggregate amount up to $5 million depending on individual limits purchased and aggregate limit of the Union Liability policy.
7. If a union leader needs a defense attorney, who will represent them?
With Ullico Casualty Group, you do not pick an attorney from a predetermined list of lawyers who may not keep your best interests in mind. Subject to approval, you may choose your own defense counsel, someone you can trust and who knows you and your union.
8. Must all labor leaders elect the same amount of coverage?
Not all labor leader have to purchase the coverage. However, they should all elect the same level of coverage, e.g. - $100 annually for $100,000 of coverage. Varying levels of coverage are subject to review.
9. How do I notify Ullico Casualty Group as to which labor leaders want the ILL coverage?
At the time the new or renewal Union Liability policy is bound, the union should provide the broker a list of the names and titles of all leaders electing ILL coverage, along with the amount of coverage elected.
10. Can union leaders afford not to have ILL coverage?
Although the union may be able to reimburse labor leaders found innocent of these types of charges, labor leaders risk personal financial difficulty and even bankruptcy by funding their own defense. Protect your union and your union leaders with a Union liability policy and an ILL endorsement.