MADISON, Wis. (2/25/14)--CUNA Mutual Group introduced new coverage--called Enhance Defense Reimbursement--to help protect credit unions against rising litigation costs stemming from "patent troll" and other suits that commonly aren't covered by liability policies.
More litigation risks are emerging that are not covered by traditional liability insurance policies, said John Wallace, vice president of commercial products for CUNA Mutual Group. "Emerging litigation risks continue to plague the financial industry, and even the most vigilant credit unions can fall victim to these lawsuits," he said.
The protection falls under its management and professional liability insurance policy, which was introduced in 2009 to protect credit unions against the evolving litigation landscape, Wallace added.
Some emerging but typically uncovered risks include:
Increased levels of litigation seeking injunctive relief damages (e.g. recent ATM and Americans with Disabilities Act litigation against credit unions);
Heightened patent troll litigation activity; and
Growing regulatory risks driven by Consumer Financial Protection Bureau rule making.
"Patent trolls" use low-quality patents to extract settlements from credit unions and other institutions for use of technology's such as mobile banking or even ATMs. A typical patent infringement case through trial could cost from $400,000 to $500,000, CUNA Mutual noted.