Research On Directors' And Officers' Liability Insurance

Since modern times, the directors and officers who are the representatives of senior management have become the key persons to corporate governance and their authority expands day by day. Under this expanded authority, the directors may frequently conduct behaviors harmful to company, shareholders, creditors or other persons to gain company's benefits, personal interests or other benefits. In order to protect the company, shareholders, creditors and others, many countries' corporate laws regulate the directors to bear heavy legal liability. But directors may always face various risk in business activities, and may be inevitably responsible for their wrongful conducts which will bring losses to the company because of faulty judgment, changed market situation and so on. Such responsibilities may cause high indemnity payments and lawsuit expenses of the directors, and then bring heavy burdens to the directors. In order to reduce the possible risks when the directors conduct business activities, and avoid threats based on improper goal lawsuit to the directors, the D&O liability insurance came into being.Nowadays, the D&O insurance has been introduced to China, but it does not develop as desired. The purposes of this thesis are to make a deeper discussion of the D&O insurance system thoroughly, and to discuss the principle of law of the D&O insurance and the primary coverage of the D&O insurance contract, in order to provide theoretical supports for the D&O liability insurance development in China.The thesis includes following contents:The introduction: This part analyzes why the D&O liability insurance produced and proposes the necessity of studying on the D&O liability insurance in China. Besides, it also introduces the research of this thesis is based on the mature American D&O liability insurance and other countries'experiences.Chapter 1: The basic theories of D&O insurance.First, it discusses director's civil liability which is the foundation of the D&O liability insurance and analyzes the insurability of the director's civil liability.Second, after the introduction of the concept and connotation of the D&O liability insurance, it introduces the value and the related arguments of the D&O liability insurance system as well as the relationships between the D&O liability insurance system and other systems which also protect the directors.Chapter 2: The D&O liability insurance contract.In this part, it discusses the D&O liability insurance contract thoroughly, including the types of D&O liability insurance contract, the structures of D&O liability insurance contract, the coverage of the D&O liability insurance contract, such as the insured, the wrongful conducts, the loss, the exclusions and so on.Chapter 3: The questions and perfections of D&O liability insurance in China.In this part, it discusses questions exist in the development progress of D&O liability insurance in China, and proposes methods to improve it.The conclusion part summarizes the full text, and emphasizes the goal of this thesis once more.