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CUNA Mutual Group adds Defense Reimbursement coverage

MADISON, WI (February 25, 2014) – To help protect credit unions against rising litigation costs, CUNA Mutual Group has introduced Enhanced Defense Reimbursement, a cutting-edge coverage within its Management & Professional Liability insurance policy that reimburses credit unions for certain defense costs associated with claims that are commonly not covered by liability policies.

More and 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.”

CUNA Mutual Group now offers expanded protection to help credit unions with emerging exposures not covered by traditional liability policies. “Enhanced Defense Reimbursement is a first-of-its-kind coverage addition to our Management & Professional Liability policy that was introduced in 2009 to better protect credit unions against the evolving litigation landscape.”

The core of product development at CUNA Mutual Group involves having a sophisticated understanding of the unique risk trends and exposures that impact credit unions and then designing coverages to protect against those risks. “We have continued to deliver numerous industry firsts over the last five years, and Enhanced Defense Reimbursement is yet another example of that,” Wallace said.

This additional coverage is timely, as credit unions face increasing litigation in several areas. Some emerging but typically uncovered risks that led CUNA Mutual Group to develop Enhanced Defense Reimbursement 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
  • Growing regulatory risks driven by Consumer Financial Protection Bureau rulemaking
  • Disgorgement claims, such as the overdraft re-sequencing litigation

Recent news stories of patent infringement cases have emerged alleging some credit unions were in violation of certain patents by not having a proper license. Patent trolls continue to file suits resulting in increased patent infringement cases including those involving technology (online banking, ATM, etc.) which have been costly to credit unions. A typical patent infringement case through trial could cost from $400,000 to $500,000.

“New rules from the Consumer Financial Protection Bureau’s went into effect Jan. 1, 2014, which will expose credit unions to potential violations. While the CFPB has direct enforcement for credit unions with more than $10 billion in assets, their rules will impact all credit unions.”

In addition, litigation involving alleged overdraft re-sequencing has recently made news as some credit unions were accused of reordering debits, largest to smallest in order to generate increased overdraft fees. These suits seek to have these increased fees disgorged, or returned. Such disgorgement claims have not traditionally been covered by insurance.

Various limit, deductible and co-pay options will be available. More information can be obtained by contacting your CUNA Mutual Group sales executive at 800-356-2644.

To learn more, follow @CUNAMutualGroup on Twitter, circle +CUNA Mutual Group on Google+, or visit: http://www.cunamutual.com/portal/server.pt/community/cuna_mutual/402/_gac_2014/897683?utm_source=cunamutual&utm_medium=press_release&utm_campaign=gac.

CUNA Mutual Group was founded in 1935 by credit union pioneers, and our commitment to their vision continues today. We offer insurance and protection for credit unions, employees and members; lending solutions and marketing programs; TruStage®-branded consumer insurance products; and investment and retirement services to help our customers succeed. More information is available on the company’s website at www.cunamutual.com.

 

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