North Carolina-based Builders Mutual Insurance Company is the first medium-sized company to face a class action lawsuit over a data breach on its computer systems, a 2022 cyberattack that may have exposed personal data. Became one of the non-life insurance companies. Over 64,000 people.
“Plaintiffs are suing Builders Mutual for failing to adequately protect the names, dates of birth, Social Security numbers, and workers’ compensation information of Plaintiffs and similarly situated individuals from hackers.” We are filing a class action lawsuit,” the amended complaint states. It was filed last week in federal court in North Carolina.
In recent years, insurance companies around the world have faced insurance losses due to cyber-attacks on policyholders and embarrassing lawsuits over coverage, including an insurance company that has filed a class action lawsuit over reports of a breach of its computers. are relatively few. Marsh & McLennan Companies was famously sued by employees after a 2021 computer breach exposed personal information to cybercriminals. The case is still pending, but an appeals court ruling last fall could lead to more U.S. lawsuits alleging damages from cyberattacks, even if plaintiffs fail to show evidence their data was improperly used. My sexuality has increased.
Now, Builders Mutual, a Raleigh-based company with contractors in several Southeastern states, is facing its own lawsuit following a 2022 data breach. Builders Mutual reported the attack to regulators in September 2023, long after the suspicious computer activity was discovered, the plaintiffs said.
“Builders Mutual waited nine months to notify the public, including Plaintiffs and class participants, that they were at risk,” the lawsuit alleges.
The plaintiffs, including Matthew Kocher and Mark Logolino of Florida and James Jackson of Virginia, are seeking millions of dollars in damages. The lawsuit alleges that more than 100 other plaintiffs may join the lawsuit.
Builders Mutual, which celebrates its 40th anniversary this year, provides workers’ compensation, general liability, builder’s risk, auto, real estate and other coverages to businesses including several homebuilder associations, according to the company’s website. provided to customers. The company had about 365 employees and annual sales of about $384 million, according to the complaint. Michael Gerber is President and CEO.
The mutual insurance company failed to follow Federal Trade Commission and other guidelines on cybersecurity, including deleting personal data when it was no longer needed and implementing protections against unauthorized access, the complaint said.
Mr. Logolino, one of the plaintiffs, has already suffered identity theft, including fraudulent benefit claims filed in his name, fraudulent cell phone bills, and thousands of dollars in fraudulent utility bills for services he never received. suffered, the lawsuit alleges. Mr. Kochel claimed that cybercriminals charged his credit card for movie tickets and retail store purchases.
Builders Mutual has not yet filed an answer to the complaint or a motion to dismiss the lawsuit. The company could not be reached for comment Sunday. It was not reported whether Builders had secured its own cyber insurance ahead of the 2022 attack.
Cyber-attacks and related litigation are likely to continue to be a serious threat to insurance company revenues in the coming years. 2022 report Researchers at computer security firm Insights say the insurance industry has become a target for ransomware and other cyber-attacks, in part because insurers hold vast amounts of personally identifiable information about policyholders. He said there was. Insurance companies may also be targeted by hackers, as policyholders with cyber insurance are thought to be more likely to pay a ransom.
The cyber insurance market took a hit during the pandemic, but has rebounded in 2023 with significant premium increases, according to news reports.
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