On the Corporate Demand for Product Liability Insurance: Evidence from Listed Compaines in Taiwan

• Main Authors: Huang,Hui Lin, 黃慧琳
• Other Authors: 陳彩稚
• Format: Others
• Language: zh-TW
• Published: 2008
• Online Access: http://ndltd.ncl.edu.tw/handle/82932486545200633997

碩士 === 國立政治大學 === 風險管理與保險研究所 === 96 === This paper investigates the corporate demand for product liability insurance in Taiwan. The motivations to purchase product liability insurance can be categorized into four groups, business operation incentive, features of the firm, product safety management, and financial management. The decision of insurance is analyzed based on the logistic model and multivariate regression models with a sample of 90 publicly traded companies in Taiwan. The empirical results of this study indicate that customers’ requests, product risk financing, and product marketing are the determinants for companies to buy product liability insurance. Further, the companies with previous experience of product liability losses have higher product liability insurance demand. Those companies selling their products to North America and Taiwan will purchase more product liability insurance. Moreover, the empirical evidences suggest significantly positive correlation between product safety management and product liability insurance demand, which is consistent with Ehrilich and Becker (1972) that market insurance and self-protection are complements. The results also show that the firm will purchase more product liability insurance when it has larger firm size, greater product sales, higher debt to equity ratio, and no long term debt.