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Insurance Monitoring and Loss-Prevention Programs

Insurance Monitoring and Loss-Prevention Programs

Chapter:
(p.105) Chapter six Insurance Monitoring and Loss-Prevention Programs
Source:
Ensuring Corporate Misconduct
Publisher:
University of Chicago Press
DOI:10.7208/chicago/9780226035079.003.0007

This chapter examines insurance monitoring and loss-prevention programs in the context of Directors' and Officers' liability (D&O) insurance. The findings reveal that D&O insurers neither monitor nor provide loss-prevention programs to the corporations they insure, and that, in the few cases that a loss-prevention advice is given, it is only done to promote or market the insurer rather than to constrain the conduct of the insured. The chapter provides an account for the absence of monitoring by insurers and highlights its implications, particularly moral hazard.

Keywords:   insurance monitoring, loss-prevention programs, D&O insurance, insured, moral hazard

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