We investigate whether corporate finance incentives affect the extent of corporate hedging with property insurance. Using a database that contains detailed insurance information, we document a positive relation between the expected costs of distress and property insurance coverage. We also show...

We investigate whether corporate finance incentives aect the extent of corporate hedging with property insurance. Using a database that contains detailed insurance information, we show that rms buy property insurance to reduce the expected costs of distress. Further, we document a scale effect:...

We investigate whether corporate finance incentives affect the extent of corporate hedging with property insurance. Using a database that contains detailed insurance information, we show that firms buy property insurance to reduce the expected costs of distress. Further, we document a scale...