The Improvement Of Directors And Officers' Liability Insurance Of Our Country

Directors'and Officers'Liability Insurance, which is called D&O liability insurance for short, is a insurance system that the insurance companies take the responsibility of compensation according to the insurance contract which is supposed to be taken by the directors and officers when their fault behaviors cause the companies'or a third party's economic lossesThe D&O liability insurance system was designed to protect the interest of the directors and officers so as to make the company stable and the market economy operated orderly. In a complex market economy situation, the directors and officers, as the real business dealer and main decision makers in companies, may always face various risks in business activities, and may be inevitably responsible for their wrongful conducts which may bring losses to the company and a third party because of their faulty judgments or changed market situation and so on. Such responsibilities may cause high indemnity payments and lawsuit expenses that are far more than directors and officers'income, and bring heavy burdens to them when they make business decisions. In order to balance this kind of non-equivalences and reduce the possible risks when they conduct business activities and devote themselves to their worker better, the D&O liability insurance came into being.The economic reform has been many years in China and the reform mainly aimed at constructing socialism market economy. The corporate system well done in the developed countries is such an important part of market economy that it became a primary model for our learning. Nowadays, there are all kinds of corporations in our markets and also a lot of inevitable problems in the developing progress of the corporate system. In order to resolve such problems, we have to learn more experiences about the corporation-related systems in developed countries, and the D&O insurance system is exactly one of which.Herein the new corporation law has prescribed the civil liability system of the directors and officers, the paper considers that although China has the conditions for the D&O liability insurance system to exist and develop,there still are a lot of work to do with reforming and perfecting the legislation norms. On the basis of current domestic situation mentioned above, the author tries to, through discussing and comparing the D&O liability insurance system of developed countries, using their experiences and reference, provide some helpful suggestions which help to perfect the D&O liability insurance system in China.This paper includes three parts:The first part is the summarization about D&O liability insurance. The main content of this part is to introduce the conception and development of the D&O liability insurance. The second part focuses on the legal theory of D&O liability insurance. In this part, the directors'status, duties and liabilities have been discussed in detail. Civil liability is considered to be the important basis of D&O liability insurance. Part three is about some difficulties which need to overcome through the development of D&O Insurance in our country and some suggestion for the perfection of this system.