More companies boost executive liability coverage under stricter responsibility rules

Demand for liability insurance for directors and officers (D&O insurance) is surging rapidly as companies move more actively to protect executives from legal risks, insurance industry officials said Thursday. The trend follows a recent amendment to the Commercial Act, which aims to strengthen minority shareholder protections by expanding directors’ fiduciary duties to include shareholders, a change that increases the likelihood of shareholder derivative suits and damage claims against executives. The new accountability framework for financial companies is also adding to litigation risks, making D&O insurance more of a necessity than an option. D&O insurance provides coverage for legal costs and compensation when executives cause losses to shareholders or third parties through errors, negligence or breaches of duty. Companies purchase these policies to ensure executives can operate confidently and make proactive decisions without personal financial exposure. According to industry officials, premiums from new D&O insurance policies issued by the five major non-life insurers — Samsung F