Insurers Revive Suit Against Blackbaud Over Data Breach Response

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Blackbaud Inc. faces revived data breach claims from insurers after the Delaware Supreme Court ruled that presenting an aggregate case on behalf of insured parties affected by a major ransomware attack didn't put the software company at a disadvantage. The insurers, including Travelers Casualty and Surety Company of America and Philadelphia Indemnity Insurance Company, stated a valid breach of contract claim under New York law over Blackbaud's response to the cyber attack.

Why it matters

This ruling allows insurers to pursue a class-action style lawsuit against Blackbaud, which could result in significant financial penalties and reputational damage for the software company. It also highlights the ongoing legal battles between companies and insurers over data breaches and the appropriate response measures.

The details

The lawsuit stems from a 2020 breach of Blackbaud's servers, which resulted in the theft of confidential customer data. The insurers who covered losses for Blackbaud's clients are now seeking to recoup those payouts from the software company, alleging it failed to properly respond to and mitigate the impact of the ransomware attack.

• The data breach occurred in 2020.
• The Delaware Supreme Court ruled on the case in February 2026.

What’s next

The case will now proceed to trial, where Blackbaud will have to defend its response to the 2020 data breach and the insurers will seek to recoup their payouts to affected clients.