Insurance technology provider Zywave has agreed to offer an $11 million fund to settle a class-action lawsuit related to a data breach at a company it acquired in 2020.
A proposed class-action suit was filed against Insurance Technologies Corp. (ITC) following a data breach that occurred on February 27. 2021. ITC, which was acquired by Zywave in November 2020, began notifying customers and attorneys general of the breach on May 10, 2021.
The class-action lawsuit was filed in June 2021. It alleged that the ITC breach gave hackers access to names, Social Security numbers, driver’s license numbers, dates of birth, and log-in credentials of thousands of ITC customers, potential customers, and other individuals.
Carrollton, Texas-based ITC had more than 250 insurance companies and more than 9,000 agencies as clients when it was bought by Zywave. It claimed to be the largest provider of insurance agency websites in the United States and supported more than two million monthly auto and home quotes through its comparative rater TurboRater.
Court documents said hackers gained access to ITC’s AgencyMatrix application, a cloud-based agency management system. According to allegations outlined in the court documents, ITC said it contained the data breach on March 4, 2021.
“However, despite first learning of the data breach in February 2021 and concluding the investigation in March 2021, [ITC] did not take any measures to notify affected class members for over two months, on or about May 10, 2021,” the lawsuit alleged.
According to settlement-agreement documents filed late last month in U.S. District Court for the Northern District of Texas by one of the plaintiffs’ lead attorneys, Zywave will pay to notice potential class members, reimburse up to $5,000 per class member for out-of-pocket losses including compensation for lost time, and provide one year of free credit monitoring services.
Plaintiffs’ counsel intends to present fees of one third of the settlement fund – about $3.7 million – plus expenses not to exceed $30,000, to be paid out of the fund.
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