Since financial crisis has become a critical issue, no matter government or firms and even investors should be pay more attention on managerial behavior. Therefore directors and officers should be liable for the corporation misconducts. Directors’ and officers’ liability is designed to protect directors and shareholder wealth. With publicly available and relatively complete dataset of listed firms in Taiwan in which the information of directors’ liability insurance is disclosed since 2008, in this paper, we attempt to revisit the role of directors’ liability insurance through a topic that has not been explored. In particular, we suspect the firms’ investment decision-making process could be differential in firms with and without the adoption of this insurance. As previous literature documented that this insurance could be beneficial and enhance the function of the board, recent event studies in contrary reveal the cost of this insurance and suggest the purchase of this insurance are likely to accelerate the severity of agency problem. Since both arguments above tend to change managerial behavior and therefore investment decision, capturing the degree of overinvestment under firms with and without directors’ liability insurance accordingly is an opportunity to realize the pros or cons of this insurance. While almost equal amount of firms with and without this insurance in Taiwan allows us to fairly compare the difference generated by the insurance, results from this project could provide new evidence to explain the behavior of investment and help to evaluate the policy of mandatorily disclose the information of directors’ liability insurance as well.