The Legal Study On Directors Liability Insurance

Along with the market-economy development and the company governance structure's consummation, the protection of the company shareholders and other stakeholders' benefit receives more and more notice, the aggravation of the directors' civil liability also becomes the inevitable trend of the company legal system's development. Corporate management is a kind of activity filled with risks, and even the most loyalty and diligent directors may make a wrong judgment and a wrong decision, which will result in the heavy loss of his corporation and the corporation's investors, just because of the limitation of his knowledge and the lack of his abilities or of the slight negligence in mind. Thus laying too much emphasis on the directors' liabilities will lead to the drain of qualified managers, which makes against corporate management and development. Therefore, some system is needed to relieve directors' liability, which inspires directors with enthusiasm and creativity. The directors liability insurance generally used in the foreign countries is precisely such one kind of mechanism, which can diverse the risk of the directors' liability, simultaneously protect directors' interests.Directors liability insurance has matured in foreign countries , which has an integrated system. Along with the development of law system and corporate governance structure, directors' liability is emphasized. Therefore, directors are also more and more possible to face the lawsuit. However, the legislation in China now ignores the protection of directors' interests. Directors liability insurance is a good mechanism that can diverse the risks and balance the directors' rights and responsibilities. However, since introducing the mechanism in 2001, there is the obstacle of the legal regime in China which rendered the establishment of Directors liability insurance system in our country. Based on this background, the author endeavor to use the overseas' mature concrete system for reference, and put forwards some suggestions on the development of Directors liability insurance under considering current situation in China.