Liability Insurance Research Articles

Abstract Liability insurance is a vital source of financial protection and risk management for individuals and organizations. However, its widespread adoption carries certain unintended consequences, including the amplification of liability risks for uninsured and underinsured populations. This may result in a liability insurance consumption spiral, where purchases by some incentivize others to follow suit. The current study provides the first empirical tests of the consumption spiral hypothesis. Using data from 280 Chinese cities over an eight-year period (2011–2018), we find evidence that liability insurance purchases influence those in nearby geographic units and subsequent time periods. These knock-on effects are substantial and support the notion that purchase decisions are positively correlated. Additionally, our results reveal a key externality of liability insurance markets and the ways in which consumption diffuses across space and time.

As ESG (Environmental, Social, and Governance) issues draw increasing attention, Directors and Officers (D&O) liability insurance has emerged as a critical tool in corporate risk management, playing a positive role in enhancing corporate governance and reducing operational risks. Against this backdrop, preventing ESG decoupling is essential for achieving sustainable and high-quality development. Based on data from A-share listed companies between 2007 and 2023, this study investigates the impact of D&O insurance on corporate ESG decoupling. The empirical results indicate that D&O insurance significantly mitigates ESG decoupling, with the effect being statistically significant at the 1% level. Specifically, D&O insurance alleviates ESG decoupling primarily by easing firms financing constraints, curbing managerial short-termism, and increasing R&D investment. These findings provide robust empirical evidence for the role of D&O insurance in promoting sound and high-quality corporate development and offer valuable insights for policy formulation and corporate management practices.

Medical negligence is one of the most complex issues in Indonesia's criminal law system and healthcare services. This problem arises when medical actions do not meet professional standards, resulting in harm, serious injury, or patient death. This research aims to analyze criminal law regulations regarding doctors' liability in cases of medical negligence, identify juridical and normative constraints in proving it, and offer directions for legal reform to achieve a balance between legal protection for patients and legal certainty for medical personnel. This research uses a normative juridical method with statutory, conceptual, and case approaches. The research results show that the criminal liability of doctors has been regulated in the old Criminal Code (Articles 359 and 360), the new Criminal Code (Article 474 of Law Number 1 of 2023), and Law Number 17 of 2023 on Health. However, there is no lex specialis that clearly distinguishes between professional negligence and medical malpractice, resulting in overlaps between ethical, disciplinary, and criminal violations. The main obstacles in proving the element of fault (culpa) lie in the difficulty of determining the causal relationship between medical actions and their consequences, weak medical record documentation, and lack of synchronization between professional ethical mechanisms and criminal law processes. Therefore, legal reform is needed to clarify the boundaries of criminal liability for medical personnel through the implementation of alternative dispute resolution (ADR), restorative justice, and professional liability insurance systems. Comprehensive legal reform is expected to create a fair, balanced health law system that provides legal certainty for all parties.

Abstract Commercial drunk-driving liability insurance may incentivize the insured’s drunk driving or attract drinkers’ purchase. This paper investigates whether drunk-driving liability insurance elicits the insured’s opportunistic motive. Empirical results show that the insured who purchase drunk-driving liability insurance have a higher possibility of incurring a drunk-driving accident, suggesting that drunk-driving liability insurance may induce adverse selection or moral hazard. On the other hand, after an amendment to the Criminal Code of Taiwan in June 2013, stricter standards for offenses against public safety and aggravated criminal liability have not altered policyholders’ demand for drunk-driving liability insurance but reduced the probability of drunk-driving accidents. The imposition of mandatory stipulations on drunk driving is therefore not associated with the alleviation of adverse selection but can reduce the moral hazard induced by drunk-driving liability insurance.

This paper examines the legal regulation of medical procedure safety and proposes avenues for legislative enhancement informed by international norms. A comparative legal analysis was performed utilising the cases of Bulgaria, Italy, and Kazakhstan. The study utilised a systematic methodology to evaluate legal efficacy and predictive techniques to delineate potential advancements. The findings reveal that all three countries acknowledge the right to healthcare at the constitutional level, but implementation strategies vary. Bulgaria and Italy utilise insurance-based healthcare systems that incorporate private sector involvement. Bulgaria faces challenges in harmonising its law enforcement with European norms, whilst Italy's decentralised Servizio Sanitario Nazionale results in regional disparities. Kazakhstan upholds a state-centric regulatory framework but lacks comprehensive legal safeguards for patients and medical practitioners, especially concerning liability insurance. No country possesses a comprehensive legal framework for digital medicine. Key proposals include improving insurance protections, harmonising national laws with international norms, and regulating emerging medical technologies.

ABSTRACT This study investigates how interlocking directors with green experience (IDGEs) influence corporate green innovation resilience, based on panel data from 4,400 Chinese A-share listed firms during 2009–2023, estimating the effect using a multivariate fixed effects regression approach. We find that IDGEs significantly increase green innovation resilience (coefficient = 2.372, p < 0.01), mainly by strengthening managerial green awareness and facilitating access to environmental resources. The positive impact of IDGEs is amplified under external compliance pressure but mitigated when firms have mature internal environmental systems. Further analysis reveals that the effect is more pronounced in firms that purchase directors’ and officers’ liability insurance and those that employ executives with environmental backgrounds. These findings underscore the importance of board-level environmental expertise in improving firms’ adaptive capacity in the green transition, particularly under increasingly stringent regulatory and market constraints.

A decade ago, the oil and gas sector was bracing for an aging workforce edging toward retirement while a new generation stepped into complex, high-risk roles. This transition, dubbed “The Great Crew Change,” raised real concerns about losing hands-on, battle-tested knowledge that only many years in the field can teach. Today that transfer is well underway, but a different and unexpected threat to safety has emerged: the integrity of how we train and verify those who will keep our industry running. Adopting new technology is essential to remain competitive, and moving training online has expanded access and reduced costs. However, a critical flaw arises when organizations fail to monitor how their online training can be bypassed. So, while moving training online is imperative, we must also not turn a blind eye to how easy it is to click through a course without learning anything meaningful. For workers in the oil and gas industry, where distinct and acute safety hazards contribute to some of the highest workplace fatality rates, training must be a verifiable process, not a risk-washing exercise designed to keep legal and insurance liabilities at bay. It’s unacceptable for organizations to check a compliance box while workers remain unprepared for high-risk situations. The oil and gas workforce is evolving. New workers trained through online modules are entering an industry where real experience and quick thinking can mean the difference between life and death. But unless we change how we approach online training, this time the next generation won’t be fine. When we think about workplace hazards, we often focus on the sharp end, the frontline where direct interactions with hazards occur. But failures at the sharp end often reflect latent issues from the whole decision-making chain, the most pressing example being improper training. With the rapid advancement of artificial intelligence (AI), bypassing online training has become not just easy, but remarkably sophisticated. AI tools can answer complex questions, generate plausible responses, and even simulate human-like engagement, allowing individuals to "complete" courses without even being present to absorb the critical safety information. At Cognisense, our office pug Phoebe has earned more than 200 certifications across various high-risk industries. Her latest achievement? A government-issued online defensive driving certificate. Phoebe doesn’t know how to drive—she’s a dog—yet, on paper, she’s certified to operate a vehicle safely. That’s how easy it is to earn some online safety training credentials.

The article examines the legal basis for professional liability insurance of medical professionals as an effective mechanism for protecting the right to health protection. The author focuses on the specifics of medical activities associated with the risks of harm to patients' health, which can be caused not only by professional violations, but also by other subjective and objective factors (for example, poorly understood diseases, poor material equipment of clinics, etc.). A review of professional liability insurance systems for medical professionals in developed foreign countries is conducted. An analysis of the best practices of medical personnel insurance in various countries shows that despite differences in approaches to regulation, it is aimed at protecting doctors from financial risks and ensuring guaranteed compensation for harm caused to the health or life of patients. The article analyzes the conditions for professional liability insurance for harm caused in the provision of medical services, the features of the professional liability co-insurance agreement for medical professionals, and its content. The author's definitions of terms related to professional liability insurance for medical workers are given. Particular attention is paid to the characteristics of the insurance object, the insurance event, which are considered in the context of the objectives of professional liability insurance. Based on the analysis of domestic and foreign insurance systems, the author identifies the main advantages and opportunities for professional liability insurance of medical professionals in Kazakhstan. It is concluded that the insurance rules established by law (mandatory nature of insurance, establishment of the amount of insurance premiums and insurance payments, the presence of an independent body for reviewing patient complaints about compensation) are aimed at ensuring fairness and transparency of insurance procedures. The problems of legislation and practice of applying the new type of insurance are identified, and ways to solve them are proposed.

The article addresses the issue of civil liability of mediators in the context of the lack of mandatory civil liability insurance. The analysis takes into account the basic premises of tort liability, such as illegality, guilt, damage and adequate causal relationship, referring them to the specificity of mediation activity. It indicates the consequences of the lack of institutional protection in the form of mandatory third party liability insurance, both for the parties to mediation proceedings and the mediators themselves, who may bear personal financial liability. It also emphasizes the growing popularity of mediation among legal practitioners and parties to the conflict, which increases the need to regulate professional liability standards in this area. In conclusion, the postulate of introducing mandatory third-party liability insurance for mediators is formulated as a tool to increase the professionalization of the profession and to provide real legal protection to mediation participants.

Care or fear? The link between D&amp;O liability insurance and CSR engagement: Evidence from China

Objectives:Orthopaedic surgeons play a critical role in ensuring the health and safety of professional athletes. Despite the privilege of treating elite athletes, there exists great financial exposure to individual physicians in the event of a malpractice lawsuit. The purpose of this study was to evaluate and model malpractice liability exposure of the sports medicine surgeon caring for athletes in the National Football League(NFL), Major League Baseball(MLB), and National Hockey League(NHL) with respect to player position and additional supplemental malpractice insurance needs. We hypothesize that current liability coverage cannot adequately address the demands of caring for elite athletes in major sports leagues.Methods:2,447 NFL, 992 MLB, and 980 NHL player contracts from the 2022-23 season were aggregated from a publicly available online database. Position, team, total contract value, and average yearly salary were noted. Risk ratios were calculated with respect to $1mm USD and $3mm USD of annual occurrence-based malpractice liability awards and used to generate a “covered-to-treat” analysis. Supplemental malpractice liability insurance was quantified.Results:Assuming $1mm USD and $3mm USD occurrence-based awards covered by malpractice liability insurance, team physicians can fully are financially eligible to treat 17.3% and 50.0% of NFL players, 43.2% and 59.7% of MLB players, and 13.6% and 41.0% of NHL players, without incurring additional personal financial risk, from a risk-based medicolegal model. Liability policies of $52.6mm USD, $108.1mm USD, and $64.1mm USD are required to treat 95% of NFL, MLB, and NHL players, respectively. Positions carrying the greatest risk ratios are QB(9.9) in the NFL, Right Field(15.1) in the MLB, and Center(5.7) in the NHL.Conclusions:Sports medicine specialists caring for elite athletes face potential personal financial risk due to insufficient medicolegal coverage. While coverage may vary amongst different practice settings including private, academic, or public state institutions, medical malpractice risk is crucial in partnerships between sports franchises, hospitals, players, agents, and physicians to protect sports medicine physicians and offer the highest quality care.

The rapid advance of artificial intelligence (AI) has significantly impacted all aspects of society. AI has rasied complex ethical and legal issues. These issues cannot be easily addressed under existing legal frameworks. In particular, the autonomous decision-making by AI often unpredictable and opaque — necessitate an appropriate level of regulatory oversight. Establishing public trust in AI is crucial for ensuring its ethical, economic, and social sustainability. Trust presupposes knowledge of, or the ability to know, the subject to be trusted. However, where a high degree of technical expertise is required or an imbalance of information exists, verification by credible public institutions may play a key role in facilitating trust. Another essential element in building trust is the availability of effective remedies in cases of harm. Accordingly, regulatory obligations such as transparency, explainability, ex ante impact assessments, and human oversight are increasingly emphasized. The EU has adopted the world’s first comprehensive regulation on AI, ｢Artificial Intelligence Act｣, which applies a risk-based approach by imposing stricter requirements on high-risk AI systems. These include risk management systems, transparency, and human oversight. Similarly, Korea's ｢Framework Act on the Promotion of AI and Establishment of Trust｣ follows a comparable structure but requires further elements for building trust. For example, while the Act includes provisions on the duty to explain AI algorithms, it lacks clarity on the required level of explanation and does not provide specific sanctions for non-compliance. To strengthen legal remedies for AI-related harm, further discussions are needed regarding the introduction of punitive damages, the activation of AI liability insurance schemes, and the lowering or reversal of the burden of proof. These measures can enhance the accountability of AI systems and contribute to building public trust in AI.

As the "Belt and Road" Initiative advances, the scale of outward investment by Chinese enterprises continues to expand, but they simultaneously face a series of obstacles. Host countries' increasingly stringent environmental regulations lead to heightened environmental legal risks. Concurrently, domestically, the absence of specialized environmental protection legislation for overseas investment, coupled with the lack of extraterritorial effect of China's Environmental Protection Law and other practical issues, results in insufficient legal oversight of outward investment, urgently necessitating systematic solutions. This paper focuses on the environmental protection obstacles faced by enterprises in their outward investment and corresponding resolution mechanisms. It emphasizes analyzing the risks posed by host country environmental regulations and the gaps in home country legal supervision, proposing pathways for the improvement of legal regulation. Based on the above research, this paper proposes a three-tier resolution mechanism. First, improve the top-level design by expediting the formulation of the Overseas Investment Environmental Protection Law and upgrading existing guidelines into administrative regulations. Second, construct a compliance firewall centered on the "Three-Nation Law" database, utilizing contractual liability allocation as a tool, and backed by environmental liability recourse and insurance. Third, strengthen Corporate Social Responsibility (CSR), implement environmental protection strategies tailored to local conditions, and impose stricter constraints on heavily polluting industries. Finally, it is hoped that this research will help resolve the environmental legal issues faced by enterprises during their outward investment under the "Belt and Road" Initiative, balance economic development with environmental protection, and promote sustainable development.

Within the limits of this article, the legal nature of the institute of civil liability insurance of the lawyer is revealed, primarily through the prism of determining the reasonable and fair sizes of both insurance contributions and insurance coverage. Attention is drawn to the fact that determining the size of both insurance premiums and insurance coverage, as important elements of the lawyer’s civil liability insurance mechanism, is perceived as a clear obstacle to the introduction of such an insurance mechanism in Ukraine. It is concluded that the difficulty of fixing the above amounts, primarily in the aspect of determining the optimal ratio between them, in particular, is that, on the one hand, the amount of insurance contributions should not be perceived as a financial burden for the lawyer, and on the other hand, the amount of insurance coverage should in turn, to ensure the property interests of the lawyer’s client. This article is also devoted to clarifying the experience of the legislators of foreign countries (the Republic of Italy, the Federal Republic of Germany, the Republic of Austria, the French Republic, the Republic of Lithuania, Romania, the United States of America and Canada) primarily in determining the minimum (guarantee) amounts of insurance sums. It is concluded that primarily in order to ensure the interests of the lawyer’s client, a number of foreign countries at the legislative level establish minimum (guarantee) amounts of insurance sums, as well as various indicators that affect the determination of this amount in the conditions of mandatory civil liability insurance of lawyers. Attention is drawn to the fact that although foreign countries (in particular, European countries) use different approaches to their definition, we believe that the Ukrainian legislator should fix the minimum amounts of insurance sums, the calculation of which should depend on certain indicators (primarily the form and scope of the lawyer’s activity, duration employment as a lawyer in general).

Purpose This study aims to analyze intellectual capital on financial stability with a comprehensive look at the property–liability (P-L) insurance operations and explore the moderating effect of fintech. Design/methodology/approach This study collects data from P-L insurers in Taiwan from 2010 to 2020. Using ordinary least squares and hierarchical regression models to examine the impact of intellectual capital on financial stability and the moderating effect of fintech. Findings The results find that intellectual capital affects financial stability and reveal an inverted U-shaped relationship between human capital and financial stability. While structural capital is significantly negatively related to solvency ratio. E-commerce and artificial intelligence (AI) + big data + cloud computing are significantly positively related to solvency ratio, blockchain and the Internet of Things are significantly negatively related to Z-score and solvency ratio, respectively. Furthermore, fintech moderates the relationship between intellectual capital and financial stability. Originality/value These results offer new insights to insurers’ manager for improving financial stability by effectively using intellectual capital composition characteristics and fintech to enhance financial stability and provide a reference for insurers in developing countries to establish an early warning and stable financial system.

In the context of global economic integration, multinational corporations have become a significant force in driving global economic growth. However, the issue of their social responsibility in host countries is becoming increasingly prominent. This article focuses on two key issues: protecting the interests of multinational company employees and addressing environmental responsibilities. In practice, some multinational companies have engaged in labor rights violations, such as underpaying wages, excessive overtime, and neglecting occupational health and safety, as well as environmental pollution and ecological destruction. Although China's Company Law clearly requires enterprises to assume social responsibilities, there are still legal loopholes in practice, including double standards on environmental issues, lack of transparency, inadequate labor protection, and the gig economy's evasion of responsibilities. To address these issues, this article proposes a multi-level legal regulatory system: implementing mandatory environmental liability insurance, refining environmental information disclosure, adding a special chapter on cross-border employee rights protection, standardizing labor relations in the gig economy, and strengthening cross-border law enforcement cooperation and social supervision mechanisms. The aim is to achieve a balance between the economic benefits and social responsibilities of multinational companies, thereby ensuring the sustainable development of host countries.

Employing a staggered difference-in-differences design, this study examines the impact of China's Compulsory Food Safety Liability Insurance (CFSLI) policy on corporate innovation within the food industry. Empirical results demonstrate that CFSLI implementation significantly stimulated innovation among affected firms. This positive effect was heterogeneous, exhibiting greater magnitude in non-state-owned enterprises and firms operating in regions with higher levels of marketization. The core findings withstand a comprehensive battery of robustness checks. Investigation into the underlying mechanisms reveals that the policy primarily fosters innovation by alleviating financing constraints, augmenting R&amp;amp;D investment, and enhancing corporate risk-bearing capacity. Beyond stimulating innovation, the CFSLI policy also significantly enhanced the total factor productivity and overall performance of food companies. These findings collectively indicate that the CFSLI policy not only facilitated the effective translation of innovation inputs into outputs but also supported broader corporate growth. This research contributes to the literature by providing novel empirical evidence on the innovation and productivity effects of mandatory liability insurance within the credence goods sector. It offers valuable insights for policymakers seeking to leverage institutional mechanisms, such as liability insurance, to promote innovation and development in analogous industries characterized by information asymmetry, including pharmaceuticals and medical services.

Insurance is a form of mutual cooperation that provides protection against unforeseen risks. With insurance, individuals can feel more secure about potential future losses, whether related to themselves or their property. As the number of motor vehicles in Indonesia increases, so does the risk of traffic accidents, making motor vehicle insurance particularly Third Party Liability (TPL) insurance increasingly important. To enhance fairness, insurance companies implement premium systems based on claim history, one of which is the bonus-malus system. This study discusses premium calculation in a bonus-malus system for TPL insurance, assuming that claim frequency follows a Poisson-Lindley distribution and claim severity follows an exponential-inverse gamma distribution. The data used are secondary data obtained from PT. XYZ for the 2019 underwriting year, focusing on policyholders in category two. The analysis results indicate that the selected distributions fit the data well. The optimal bonus-malus system determines that the initial pure premium to be paid by new policyholders is Rp22,970. Premiums in subsequent years are adjusted based on claim activity: increasing if a claim is made and decreasing if no claim occurs.

After several years of discussion, a draft law was adopted in Kazakhstan, and at the end of 2024, a system of professional liability insurance for medical workers was launched. To consolidate the legislative initiative, amendments were made to the legal acts regulating healthcare, special orders of the supervising ministry defining the insurance procedure were issued, and amendments and additions were made to other regulatory acts.The purpose of the scientific article is to give an overview of the legal basis of a new type of insurance, analyze the available risks and the possibility of implementation in practice, and determine the necessary and sufficient conditions of professional liability insurance as a form of social and legal protection of the rights of medical workers.Following the set objectives, the article explores the essence and legal nature of professional liability insurance for medical workers, discussing the necessity and relevance of introducing this insurance system in the country today. The authors note that, alongside the formation of the legislative basis for insurance, the issues of its application in practice are also relevant. For this reason, the article extensively discusses the risks associated with the application of this type of insurance in its empirical realization.The authors concluded that the adopted package of regulations fully defines the procedure of professional liability insurance of medical workers in the Republic of Kazakhstan and should be sufficient for its introduction at the initial stage.However, it is also noted that certain risks are associated with the introduction of this type of insurance. The article presents a prediction on which the author's assessment is based.

Nonprofits are entering a tougher liability insurance environment. Commercial auto rates are rising by as much as 15%, general liability premiums are trending up to 10%, and umbrella and excess liability costs are climbing by at least 10–15%—especially in coverage lines like abuse and molestation, where capacity is tightening fast.