Policyholder attorneys said many insurers have been too aggressive applying the exclusion. “As these merger objection lawsuits have increased, I think the insurance industry doesn’t want to pay and they try to use an exclusion that was never intended to apply to the target company” such as Towers Watson, said Ray Mascia, a policyholder-side lawyer at Anderson Kill PC.

But insurance attorneys said the exclusion targets underpaid acquisitions, no matter which side of the deal the insured entity was on.

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