Glossary

A buyout settlement clause is a provision found in media liability insurance policies allowing an insured the option to refuse settlement of a claim for an amount offered by an insurer and agreed upon by a claimant.

A buy/sell agreement refers to a contract among members of a firm that provides for the continuation of the business through an agreement by which each principal agrees that, in the event of their death, their estate will sell its interest back to the business entity for a predetermined amount.

A bystander claim is a type of liability claim in which an accident bystander suffers some form of mental anguish due to witnessing this event.

Following the purchase of one corporation by another, shareholders of the acquired organization frequently bring lawsuits alleging that the purchase price paid by the acquirer—and thus the price received by the acquiree's shareholders—was too low. In some situations, insureds intentionally negotiate a below-market acquisition price, and then allow insurance proceeds paid in response to the inevitable shareholder objection to supplement that price to achieve a fair-market value in the end. Bump-up exclusions in directors and officers (D&O) liability policies preclude coverage for such losses. These exclusions were developed by insurers who perceive that such claims are essentially business risks and are beyond the scope of intended coverage under a D&O policy.