| The necessity analysis of board director's liability insuranceDirection and officers' liability insurance is an insurance that when the board director or the official carries out the job alone or collectively, causing the third party the economy loss because of his own fault, which in turn causes him a load of economic indemnification duty by law, the insurance company, as the guarantor, undertakes the economic indemnification duty according to the contract.On January 7, 2002, << the Standards for Listed Company > was made out. The 38th article says:" When the decision of the board of directors breaches the law, causing the company loss, the board directors who contribute to the decision-making undertake the duty ofcompensation to the company"-- This is the first time that thecompensation duty of the directors is prescribed in civil law in the mainland. But the board director's personal property in listed company is limited, therefore the meaning of plaintiff sue will be very limited. At the same time, small shareholder litigation cost so much, that what won in lawsuit even the indemnification of the income is still not enough to make up the litigation expenses. Therefore this prescriptive and actual function cannot work well. The writer thinks that we can consider to establish the " board director insurance system", in which the duty of the board director of the listed company with high class employees for undertaking risk is passed on to the insurance company.Direction and officers' liability insurance came into existence early in Europe and American. In 1992, in the United State, the rate of the companies taking the insurance was 81%,among which the companies possessing an asset over 1,000,000,000 USDs took up about 91%, and the rate of biological and technological companies went up to100%. Compared with this , there are only 3 companies has taken this kind of insurance in our mainland, among the 7 who have put forward the application.Comparing the data, the writer feels that it is necessary to do some research into director and officers' liability insurance.We think, director and officers' liability insurance is necessary inthe establishment of the system of compensation in civil law. To listed companies, the civil compensation can control to a large extent, the board director's behaviors, the inside quantity of the listed companies. This kind of insurance can not only encourage the director's working talent, but also insure to certain degree the board director's liability to resist risk, increasing the public's trust in the company.Along with the rising of the company's civil duty, board directors face more and more risk. Therefore, << Leading Opinions> points out" the listed company can establish the necessary and independent board director's liability insurance system, since independent board directors' job is normally associated with risk". This is the first time that the independent director's liability insurance appears in our law.The foundation of board director's liability insurance1. Foundation in EconomicsAccording to the consideration of the mechanism of competition, developed countries have devised the system of transferring the liability of board directors. This have encouraged the competitors to obtain the interests to the largest extent.2. Foundation in Corporation LawThe board director's compulsory and concrete duties includes to the duty of attention and loyalty. When breaching the duty of attention, the board director's liability cannot be neglected in principle, while the liability for breaching the duty of loyalty can be neglected or limited.3. Foundation in Insurance LawSo far, there are three kinds of board director's liability insurance, namely, the indemnification duty of the directors .the indemnification duty of the company, the indemnification duty of the insured's spouse.The design of board director's liability insurance systemThe current law in our country is far from perfect. There is a lot for us to do to establish the legal system of dire... |
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