Directors Liability Insurance Law Study

With the change of general meeting centralized doctrine to directors board centralized doctrine, directors become more powerful than ever and they play a big role in corporate administration. The directors' behavior is related with the fate of a company, so company law of almost every country strengthens directors and officers' liability. But the directors should have an open mindset in modern corporate governance, so if we are too strict with directors in corporate governance, it will harm the interest of a company and the country in long term. Facing this circumstance, many countries enact a series of measures on directors and officers' liability to ensure them work comfortably.As a means of relief, directors and officers' liability insurance is widely used in insurance industry in many developed countries, such as England and America. Peace insurance company also opened directors and officers' liability insurance on January 23^rd, 2003, which remedy the blank in our country. Contrasted with insurance companies' being zealous to develop the directors and officers' liability insurance, jurisprudential circle in our country have not pay enough attention to it. The author of this paper tries to discuss directors and officers' liability insurance from legal view.This paper consists of four parts besides preface and conclusion.Part Ⅰ mainly introduces basic theories of directors and officers' liability insurance. First the author interprets directors' civil liability and relief measure. And then he summarizes directors and officers' liability insurance. In the end, because many people have doubts and critic of directorsand officers' liability, the author points out that directors and officers' liability insurance won't lead moral risk and falling of personal liability and confirms the value of directors and officers' liability insurance by analyzing the relations among directors and officers' liability insurance, moral risk and civil liability.Part II talks about directors and officers' liability insurance legal system based on some classic foreign legislation. The author mainly introduces directors and officers' liability insurance legal system of three classic countries, America, England and Japan. In America, almost every state permits that a company buys directors and officers' liability insurance for its directors and high officers. In England, directors and officers' liability insurance is not admitted firstly, but companies act 1989 admitted directors and officers' liability in the end. In Japan, a contract of directors and officers' liability insurance consists of ordinary directors and officers' liability insurance and special insurance contract. Directors and officers' liability insurance are different in those countries because their special circumstance and legal environment of every country.Part III tries to eliminate some people' worries about directors and officers' liability insurance by analyzing its value, because it has caused many controversies and even lead directors' liability risk in developing directors and officers' liability insurance. This part mainly interprets directors and officers' insurance from necessity and possibility.Part IV discusses current defects of directors and officers' insurance and how to make it perfect. So far, directors and officers' liability insurance system in ourcountry has defects below: first, lack of some related legal system; second, limited insured object: third, narrow insurance coverage. And then the author puts forward some measures to complete directors and officers' liability insurance system.As the conclusion, the paper summarizes the legal system of directors and officers' liability insurance and brings forward suggestion to reform.