The Directors and Officers' Liability Insurance——A Legal Analysis of institution Vicissitude

The heart of directors' liability insurance lies in protecting both independent directors and leaders of director' interests. There are several defects of institution that have been reflected during applicability. Its functions are to decrease the transaction risk while the directors' work, to leave the policy-making talents. The institution is established according to available insurance interest, limited ability to take on the directors' liability, and public interests in society. But the kind insurance leads to moral risk very easily. So we shall design articles of contract beyond the directors' liability reasonable, let them pay for insurance money in order to reach the aim that strengthen directors' bounden duty.