(Abstract) The directors, as a member of the board of directors, are obliged to observe statute and articles in corporation and execute business affair with duty of care and diligence because they have mandatory relationship with corporation. Directors, in Korean Commercial Code prescribes that the ...
(Abstract) The directors, as a member of the board of directors, are obliged to observe statute and articles in corporation and execute business affair with duty of care and diligence because they have mandatory relationship with corporation. Directors, in Korean Commercial Code prescribes that the directors of corporation shall be held liable for the damages cause to the corporation due to his illegal or negligent conduct of corporate duty, and that other directors connected therewith jointly and severally liable, to corporation as well as the third-parties concerned. In general, many countries impose strict liability on directors even if the system of legislation will be different to some degree. Today, the responsibilities to the companies and the third parties are regulated so strictly that there is side effect of this regulation. The tighter enforcement of the rules governing negligence has resulted in the growing reluctance of competent persons to join the board. And in case they do not have enough resources, these regulation will be ineffective. In order to get the most responsible and competent persons to run the business, and guarantee resources to compensation, it is essential to provide them with some protection against potential liabilities. One of the methods of protection for directors against liability or damages is Directors and Officers Liability Insurance which was first written in the London market shortly after the 1929 stock market crush. In Korea, it was introduced in 1991, but it was not until the late 1990s that interest in Directors and Officers Liability coverage was awakened. Two significant events triggered interests; economic crisis in 1997 and the spread of class action. Directors and Officers Liability Insurance Policy typically affords coverage for claims first made against the insured's director and officers during the policy period. The policy will pay judgements, settlement and defence costs incurred by directors or officers as a result of claims made against them during the policy period and reported to the insurer in a timely manner pursuant to the policy alleging wrongful acts. the policy will both reimburse the corporation for its indemnification of the directors, or if indemnification does not take place, pay directly to the directors or officers. In Directors and Officers Liability Insurance, it is issued that the company can pay an insurance premium for the staffs. Confliction in affirmative and negative opinion is based on contrary interest; one is duty of care and illegal payment, the other is safe management and personnel management. The exclusion clauses in Directors and Officers Liability Insurance are to play a role of solving a problem of violation of public policy which are apt to occur in Directors and Officers Liability Insurance and deterring the Directors and Officers' wrongful act. Therefore, the comparative study of exclusion clauses make the Directors and Officers Liability Insurance to be useful for our business condition and coping with the change of business circumstances. In conclusion of comparative study, we know that according to the related statutes that some exclusion clauses in policy have been seen as variable according to the related statutes and the existing system, but the policy is regarded as a basic standard with no difference. We find that there are some exclusion clauses which will give rise to claims of risk covered and which are contrary to our circumstances, even though they are clearer than before through the revision and institution of policies.
(Abstract) The directors, as a member of the board of directors, are obliged to observe statute and articles in corporation and execute business affair with duty of care and diligence because they have mandatory relationship with corporation. Directors, in Korean Commercial Code prescribes that the directors of corporation shall be held liable for the damages cause to the corporation due to his illegal or negligent conduct of corporate duty, and that other directors connected therewith jointly and severally liable, to corporation as well as the third-parties concerned. In general, many countries impose strict liability on directors even if the system of legislation will be different to some degree. Today, the responsibilities to the companies and the third parties are regulated so strictly that there is side effect of this regulation. The tighter enforcement of the rules governing negligence has resulted in the growing reluctance of competent persons to join the board. And in case they do not have enough resources, these regulation will be ineffective. In order to get the most responsible and competent persons to run the business, and guarantee resources to compensation, it is essential to provide them with some protection against potential liabilities. One of the methods of protection for directors against liability or damages is Directors and Officers Liability Insurance which was first written in the London market shortly after the 1929 stock market crush. In Korea, it was introduced in 1991, but it was not until the late 1990s that interest in Directors and Officers Liability coverage was awakened. Two significant events triggered interests; economic crisis in 1997 and the spread of class action. Directors and Officers Liability Insurance Policy typically affords coverage for claims first made against the insured's director and officers during the policy period. The policy will pay judgements, settlement and defence costs incurred by directors or officers as a result of claims made against them during the policy period and reported to the insurer in a timely manner pursuant to the policy alleging wrongful acts. the policy will both reimburse the corporation for its indemnification of the directors, or if indemnification does not take place, pay directly to the directors or officers. In Directors and Officers Liability Insurance, it is issued that the company can pay an insurance premium for the staffs. Confliction in affirmative and negative opinion is based on contrary interest; one is duty of care and illegal payment, the other is safe management and personnel management. The exclusion clauses in Directors and Officers Liability Insurance are to play a role of solving a problem of violation of public policy which are apt to occur in Directors and Officers Liability Insurance and deterring the Directors and Officers' wrongful act. Therefore, the comparative study of exclusion clauses make the Directors and Officers Liability Insurance to be useful for our business condition and coping with the change of business circumstances. In conclusion of comparative study, we know that according to the related statutes that some exclusion clauses in policy have been seen as variable according to the related statutes and the existing system, but the policy is regarded as a basic standard with no difference. We find that there are some exclusion clauses which will give rise to claims of risk covered and which are contrary to our circumstances, even though they are clearer than before through the revision and institution of policies.
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