In the world of business, risk taking contributes to innovation. Yet, excessive risk taking is also associated with corporate failure. Many researchers have analyzed the relationship between personal liability rules of managers and excessive risk taking, and in this context, it has been often argued that insurance against personal liability of the director(s)/officer(s) (also known as D&O insurance) would weaken the manager's incentive to take care. However, little is actually known about the workings and effects of D&O insurance. This book analyzes how D&O insurance should work ideally and...