This study examines the effect of a pollution liability insurance mandate on corporate environmental compliance in Shenzhen, China. We employ a triple differences design, comparing electroplating and circuit board manufacturing firms, mandated to purchase insurance, to industries and a...

This paper aims to assess the adequacy of obligatory tax advisors' insurance to meet their needs in Poland and Czechia using the comparative-legal method. It is crucial, due to the need to protect the weaker party in a transaction and provide certainty in trading. The comparison is made between...

This study examines the effect of a pollution liability insurance mandate on corporate environmental compliance in Shenzhen, China. We employ a triple differences design, comparing electroplating and circuit board manufacturing firms, mandated to purchase insurance, to industries and a...

Purpose - This paper explores the association between directors' and officers' liability insurance (D&O insurance) and management tone manipulation. Design/methodology/approach - This study uses data from A-share listed non-financial companies from 2009 to 2021 as its sample for empirical tests....

This work provides an economic exploration of the multifaceted world of medical malpractice risk. Third party liability insurance plays a central role in protecting healthcare providers and public care institutions from the financial consequences of medical malpractice claims, although in recent...

One of the challenges in the healthcare sector is making accurate forecasts across insurance years for claims reserve. Healthcare claims present huge variability and heterogeneity influenced by random decisions of the courts and intrinsic characteristics of the damaged parties, which makes...

Directors and officers liability insurance (D&O insurance) has gradually emerged as a vital component of external governance mechanism, allowing the appropriate transfer of decision-making risks to insurance companies. While D&O insurance can serve as an incentive for directors to actively...

IFRS 17 introduces the concept of a risk adjustment that compensates insurers for the uncertainty about the amount and timing of the cash flows that arise from non-financial risks. The method for its calculation is not prescribed and several options are emerging, including value at risk and cost...

Using the sample of Chinese publicly listed companies from 2008-2018, we find that the firms whose managers are covered by Directors’ and Officers’ Liabilities Insurance (D&O insurance) are more likely to have better performance in their corporate social responsibility (CSR) activities. The...

We examine a model that incorporates two hidden-actions of the manager: a productive effort and a manipulative effort. The manager is paid a bonus based on the accounting report that the manager can manipulate. A downward restatement of the accounting report triggers lawsuits. The manager is...

There is a well-known conflict of interest between liability insurers and policyholders with respect to the decision to settle or litigate a claim. This short note provides a simple graphical explanation for the problem and grounds it in the way the structure of the parties’ payouts drives...

In a recent article, Guerra et al. (2022c) considered the problem of liability for accidents caused by the activity of robots, proposing a novel liability regime, which they referred to as ‘manufacturer’s residual liability.’ Under this regime, injurers (robot operators) and victims are...

We examine the risk-preparing benefits of Chinese audit firms' professional indemnity insurance (PII) and professional risk fund (PRF) by using the Notice on Adjusting the Application Requirement of Audit Firms for Securities Qualifications as an exogenous shock. This policy requires audit firms...

PurposeThis study aims to investigate whether firms purchase directors' and officers' liability (D&O) insurance when the country-level economic policy uncertainty (EPU) is high.Design/methodology/approachThis study uses D&O insurance data from Chinese listed firms between 2003 and 2019 to...

Der Versicherungsschutz in Haftpflicht- und Rechtsschutzversicherung knüpft an Rechtsstreitigkeiten des Versicherungsnehmers mit einem Dritten an. Soweit es um die Rechtsschutzkomponente dieser Versicherungen geht, fragt sich, inwieweit der Dritte dem Versicherungsnehmer durch Behauptung...

This paper explores the evolution of the civil liability regime for insurance claims settlement disputes in the United States, and the ways in which it has affected the incidence of disputes and litigation of insurance claims. The paper first surveys the history of insurance bad faith legal...

Whereas the literature evaluating the effect of tort reforms has focused on reported incurred losses, this paper examines the long run effects using a comprehensive sample by state of individual firms writing medical malpractice insurance from 1984-2003. The long run effects of reforms are...

We study the factors that predict medical malpractice ("med mal") insurance premia, using national data from Medical Liability Monitor over 1990 to 2017. A number of core findings are not easily explained by standard economic theory. First, we estimate long run elasticities of premia to...

In this paper, we examine the monitoring effect of Directors’ and Officers’ liability insurance (D&O insurance) on firms’ acquisitions in China. We find that firms with managers covered by D&O insurance are less likely to undertake acquisitions and if they do, their acquisitions are...

Conventional insurance law lore provides intentional torts are not, and should not be, covered by insurance. There are four primary justifications for this: 1) injuries or losses must be fortuitous (i.e., accidental) to be covered by insurance, 2) most insurance policies contain express...

We investigate the impact of the purchase of Directors’ and Officers’ liability insurance (D&O insurance) on a firm’s risk-taking behaviour in China, measured by the firm’s maturity mismatch ratio. Using a unique manually collected dataset, we find a significant positive relationship...

The core business of (re)insurance undertakings is to pool funds from policyholders and channel them to financial markets. In this context, the assessment of the financial condition and the overall solvency of these undertakings is directly associated with the level of assets held to fulfil...

Insurers' principal function – underwriting – is to assess and price customer risk. Economic theory suggests that insurers should prioritize underwriting over investment as a source of income. We find that many U.S. non-life insurers conform to theory: they consistently earn high returns on...

The aim of this study is to empirically analyse the determinants of Property-Liability Insurance (PLI) in India over a period from 1992 to 2019. Statistical methods on time series data acknowledge that a long-term relationship exists among the variables without incurring spurious regression. The...

China has introduced several governance practices to guide the healthy development of the capital market, which have prompted the development of Directors’ and Officers’ liability insurance (D&O insurance). This study finds that purchase of D&O insurance has a negative effect on corporate...

This paper concerned with the nature of legal actions that can be instituted by patients (and other interested persons) against healthcare institutions and medical practitioners for injury caused. Three actions that can be brought against doctors or medical institutions, contract, negligence,...

Using hand-collected data on purchases of D&O insurance by Chinese listed firms for the period from 2008 to 2019, we empirically find that D&O insurance negatively associates with credit spreads. The negative relationship still holds after conducting a series of robustness tests and is not...

We study the factors that predict medical malpractice ("med mal") insurance premia, using national data from Medical Liability Monitor over 1990 to 2017. A number of core findings are not easily explained by standard economic theory. First, we estimate long run elasticities of premia to...

Based on the risk hedging perspective, this paper examines the impact of directors' and officers' liability insurance (hereafter referred to as D&O liability insurance) on the pricing of corporate bonds. We find that the purchase of D&O liability insurance can effectively reduce corporate bond...

In this paper, we present a new family of bivariate mixed exponential regression models for taking into account the positive correlation between the cost of claims from motor third party liability bodily injury and property damage in a versatile manner. Furthermore, we demonstrate how maximum...

Why did shareholder liability disappear? We address this question by looking at its use by British insurance companies from 1830 until its complete disappearance by 1975. We explore three explanations for its demise: (1) regulation and government-provided policyholder protection meant that it...

This article analyzes the disclosure of the liability insurance coverage limit and the impact of mandating disclosure of the coverage limit in a setting where voluntary disclosure of a firm's cash flow information is subject to litigation risk and the firm has directors' and officers' (D\&O)...

Insurance pricing is subject to stricter regulation in some states than others. This cross-sectional variation, coupled with the occurrence of staggered deregulation in several states, enables a powerful test of the political cost hypothesis that managers manipulate accruals to mitigate adverse...