Buchbeitrag
The Demand for Directors’ and Officers’ Liability Insurance by US Public Companies
This paper uses a unique US dataset to analyze the demand for Directors' and Officers' liability insurance. This insurance protects managers most ly from sha reholder litigation. Corporate insurance presents a much different environment than individual insurance and calls for in-depth empirical investigation of the reasons why corporation buy insurance at all. Risk aversion by itself is not sufficient to explain the behavior of corporations. Mayers and Smith (1982), MacMinn and Garven (2000), among others, propose that corporate insurance plays a role in mitigating agency problems within the corporation, bankruptcy risk as well as provides real-services efficiencies, among others. Applying dynamic panel data models, these theories are the basis for the empirical tests in this paper. Boyer's (2003) hypothesis that D&O insurance is entirely habit driven is rejected, while some role for persistence is still confirmed. I confirm the real-services efficiencies hypothesis and the role of insurance in mitigating bankruptcy risk. Firms with higher returns appear to demand less insurance. Although alternative monitoring mechanisms over management and corporate governance do not appear to play a large role, I find some support that they are complements rather than substitutes. I fail to confirm the role of insurance in mitigating under-investment problems in growth companies. A size adjustment to the limits as a dependent variable is proposed for the first time and it is found to have implications for the results. The paper confirms some, but not all, well-established theories about the decision-making on corporate insurance and the significance of risk management using US panel data for the first time.
- Language
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Englisch
- Classification
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Wirtschaft
- Subject
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liability insurance
corporate insurance
dynamic panel data models
GMM
corporate governance
- Event
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Geistige Schöpfung
- (who)
-
Kalchev, Georgi
- Event
-
Veröffentlichung
- (who)
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Elsevier
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft
- (where)
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Amsterdam
- (when)
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2006
- DOI
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doi:10.1016/S0573-8555(06)74014-7
- Handle
- Last update
-
10.03.2025, 11:41 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Buchbeitrag
Associated
- Kalchev, Georgi
- Elsevier
- ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft
Time of origin
- 2006
Other Objects (12)
Directors & officers liability : D & O
Directors & officers' (D & O) liability
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Asset liability management and underwriting circles : three essays on property liability insurance companies
A stochastic Asset Liability Management model for life insurance companies
Manager liability in Germany : director liability of members of management and supervisory boards of German companies
Die directors' and officers' liability insurance in den Vereinigten Staaten von Amerika (D-&-O-Versicherung) : Vorbild für eine Aufsichtsratshaftpflichtversicherung in Deutschland?
On Liability Insurance for Automobiles
Taxing insurance companies
Oil at sea : hazards, liability, insurance
Die Vermögensschaden-Haftpflichtversicherung für Manager in den Vereinigten Staaten von Amerika : das haftungsrechtliche Bezugsfeld, die Ausgestaltung und das Zusammenwirken der Directors' and Officers' Liability Insurance mit anderen, dem Schutze der directors und officers vor persönlicher Haftung dienenden Vorsorgeeinrichtungen
Compulsory liability insurance from a European perspective
Directors & officers liability : D & O
Directors & officers' (D & O) liability
Asset liability management in insurance companies : = (Asset Liability Management in Versicherungsunternehmen)
Asset liability management and underwriting circles : three essays on property liability insurance companies
A stochastic Asset Liability Management model for life insurance companies
Manager liability in Germany : director liability of members of management and supervisory boards of German companies
Die directors' and officers' liability insurance in den Vereinigten Staaten von Amerika (D-&-O-Versicherung) : Vorbild für eine Aufsichtsratshaftpflichtversicherung in Deutschland?
On Liability Insurance for Automobiles
Taxing insurance companies
Oil at sea : hazards, liability, insurance
Die Vermögensschaden-Haftpflichtversicherung für Manager in den Vereinigten Staaten von Amerika : das haftungsrechtliche Bezugsfeld, die Ausgestaltung und das Zusammenwirken der Directors' and Officers' Liability Insurance mit anderen, dem Schutze der directors und officers vor persönlicher Haftung dienenden Vorsorgeeinrichtungen
Compulsory liability insurance from a European perspective
Directors & officers liability : D & O
Directors & officers' (D & O) liability
Asset liability management in insurance companies : = (Asset Liability Management in Versicherungsunternehmen)
Asset liability management and underwriting circles : three essays on property liability insurance companies
A stochastic Asset Liability Management model for life insurance companies
Manager liability in Germany : director liability of members of management and supervisory boards of German companies
Die directors' and officers' liability insurance in den Vereinigten Staaten von Amerika (D-&-O-Versicherung) : Vorbild für eine Aufsichtsratshaftpflichtversicherung in Deutschland?
On Liability Insurance for Automobiles
Taxing insurance companies
Oil at sea : hazards, liability, insurance
Die Vermögensschaden-Haftpflichtversicherung für Manager in den Vereinigten Staaten von Amerika : das haftungsrechtliche Bezugsfeld, die Ausgestaltung und das Zusammenwirken der Directors' and Officers' Liability Insurance mit anderen, dem Schutze der directors und officers vor persönlicher Haftung dienenden Vorsorgeeinrichtungen