Insurance Giants Set to Clash in Court Over M&A ‘Bump-Up’ Clause

A federal appeals court is set to take up a closely watched dispute over the “bump-up” exclusion—a polarizing insurance provision that dictates who pays for settlements in post-acquisition shareholder litigation.

The case at hand pits insurance broker and consulting giant Willis Towers Watson Plc, represented by star litigator Paul Clement, against its own directors and officers insurers, including units of Chubb Ltd. and American International Group Inc.

They’re sparring over whether the D&O bump-up exclusion bars insurance coverage for a $90 million settlement with shareholders who sued Towers Watson & Co. after it was acquired by Willis under an ...