Big Insurers Face Data Breach Class Actions

The Insurance Journal reports that Progressive Casualty Insurance and Builders Mutual Insurance Co are facing class-action lawsuits over 2022 data breaches of their computer systems.

The protected personal information of more than 411,000 people may have been exposed. According to the complaint against Builders Mutual in federal court in North Carolina, names, birth dates, Social Security numbers, and workers comp information were all stolen.

According to the complaint, Builders Mutual didn’t follow Federal Trade Commission cybersecurity guidelines, including removal of personal data when it is no longer needed, and implementation of protections against unauthorized access.

One plaintiff has reported fraudulent benefit claims submitted in his name, unauthorized cell phone charges, and thousands of dollars in unauthorized utility charges for services he never received.

Similar charges were leveled against Progressive in a South Carolina federal court. Progressive learned of its data breach in May 2023. “Large data storage such as this requires the highest level of protection, which Defendant failed to provide,” says the complaint.

Builders Mutual reported the attack in September 2023. According to the plaintiffs, that was long after the breach was discovered.

“Builders Mutual waited nine months to notify the public, including Plaintiffs and Class Members, that they were at risk,” the lawsuit alleges.

Insurance companies have been the targets of several hacks in recent years. Insurers are generally well-insured against losses from cyber attacks, but there has been some protracted litigation over the extent of coverage. Not many class actions have been filed.