Delaware Supreme Court Decision Revives Insurer Claims

In a noteworthy twist on February 13, 2026, the Delaware Supreme Court gave new life to insurers’ efforts to recover funds from Blackbaud, Inc. This software provider faced a severe ransomware attack in 2020, jeopardizing the personal information of various nonprofits and educational institutions.

The insurers, including Travelers Casualty and Surety Company of America and Philadelphia Indemnity Insurance Company, are now cleared to pursue over $2.1 million disbursed to 97 policyholders. The Superior Court had initially dismissed their claims, but the Supreme Court’s ruling has reinstated their pursuit.

The 2020 Cyber Breach and Its Aftermath

In 2020, Blackbaud’s systems fell victim to cybercriminals who siphoned off sensitive data such as social security numbers and financial information. Although Blackbaud initially downplayed the breach, investigations revealed critical unencrypted data might have been compromised.

Following this, Blackbaud settled with the SEC for $3 million over misleading responses and paid $49 million to state attorneys general as part of a multi-state settlement. Insurers argued that Blackbaud’s inadequate incident handling forced them to step in financially on behalf of their clients.

Supreme Court’s Stance on Insurer Claims

The recent ruling underscores that insurers had appropriately identified their policyholders and the uniform contractual issues. It emphasized that decisions about cause typically involve a jury, rather than a dismissal at this stage. The case’s return to Superior Court ensures further examination, reinforcing the evolving landscape of data breach litigation.

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