Fairfax Insurer Sues Berkley Unit Over Shareholder Settlement

A “bump-up exclusion"in an excess policy bars coverage for a $9 million settlement of a shareholder class action related to IT firm Covisint’s merger with OpenText Corp., a Fairfax Financial Holdings Ltd. insurance unit said in a complaint.

The oft-contested clause limits insurance coverage for settlements in acquisition-related cases brought by shareholders seeking damages that could be characterized as an increase in the purchase price for the target company. Insurers and policyholders have frequently disagreed on the scope of such clauses, and one dispute is pending before Delaware’s high court.

Allied World National Assurance Co., which provided excess D&O coverage, ...