Insurance brokerage firm Arthur J. Gallagher & Co. has agreed to a $21 million settlement to resolve a class-action lawsuit related to a data breach that exposed sensitive personal information in 2020. The agreement, which awaits final court approval, seeks to compensate affected individuals and provide financial monitoring services.
According to court documents reviewed by AM Best, approximately one-third of the settlement amount will be allocated to legal fees. The remaining funds will be distributed among eligible class members, with final approval scheduled for a hearing on February 27.
The data breach, which occurred in June 2020, resulted in unauthorized access to personally identifiable information, including Social Security numbers, tax identification numbers, and driver’s license details. Although Gallagher detected the breach in September 2020 and responded by taking its systems offline and engaging a third-party cybersecurity firm, the lawsuit alleged that the company failed to implement sufficient security measures to protect consumer data. Additionally, the plaintiffs contended that Gallagher delayed notifying affected individuals, with some reportedly waiting nearly a year before being informed of the breach.
Under the settlement terms, class members—numbering over three million—may be eligible for up to $6,000 in compensation for documented financial losses related to the breach. Additionally, impacted individuals will have the option to receive three years of financial monitoring services or a pro-rated cash payout. The claims process is being managed by Kroll Settlement Administration LLC.
Gallagher has not admitted wrongdoing as part of the settlement but has agreed to the terms to resolve the litigation efficiently. The final court hearing later this month will determine whether the agreement receives formal approval, allowing affected individuals to move forward with claims processing.
