Judge Rules Exclusion Doesn’t Bar Coverage In Willis Towers Watson D&O Case
In a win for policyholders, a federal court has ruled that a ‘bump-up’ exclusion in a directors and officers policy did not bar coverage for the insureds’ almost $100 million settlement of two actions relating to a 2015 merger.
Judge Anthony Trenga of the US District Court for the Eastern District of Virginia based the ruling on the fact that the merger was not an ‘acquisition’ as the term was used in the exclusion.
In 2015, Towers Watson and Willis merged to become Willis Towers Watson. After the merger, Towers Watson and some of its officers and directors were sued in class actions in Virginia federal court for alleged proxy violations of the Securities and Exchange Act of 1934, and in the Delaware Court of Chancery for breaches of fiduciary duty.
The actions ultimately settled for $100 million, according to Cohen Ziffer Frenchman & McKenna, the law firm representing Towers Watson.
However, the insurers of Towers Watson’s $80 million D&O insurance program denied coverage for the actions.