Liability insurers as corporate monitors

摘要: Corporate directors and officers are being personally sued with increasing frequency for a broad array of alleged offenses, ranging from breach the commonlaw duty loyalty to shareholders, violations federal securities laws, “looting” corporate treasury, security even “failure exercise reasonable care in selection depository bank.“’ According one report, such suits increased fourfold 1984 1985 alone.2 Although this rate increase has apparently moderated, liability officials remains controversial.3 Most public corporations have responded by purchasing directors’ officers’ insurance (“liability insurance”), which covers expenses individual as well corporation’s incurred under indemnification agreements. Proponents point out that it reduces cost compensating risk-averse encourages