As an important corporate governance mechanism,directors'' and officers'' liability insurance affects the level of enterprise innovation through the risk preference of management, management level and incentive mechanism. Whether this process can promote or inhibit is still controversial.Based on the micro data of Listed Companies in Shanghai and Shenzhen A shares from 2007 to 2018, this paper empirically studies the impact of directors'' and officers'' liability insurance on corporate innovation.The results are as follows:Directors'' and officers'' liability insurance has significant "innovation incentive" effect on enterprise innovation, especially on the improvement of innovation output and innovation efficiency. After considering the endogenous problem of control, the above conclusion still holds. The risk tolerance and management level of senior executives are important mechanisms and channels of the impact of directors'' and officers'' liability insurance on enterprise innovation Insurance significantly improves the risk tolerance and management ability of the management, and then promotes enterprise innovation; there is significant heterogeneity in the effect of "innovation incentive" in different industries, and the "innovation incentive" effect is more obvious in industries with higher technology level and competition level.In order to improve the governance structure of listed companies, accelerate the development of directors'' and officers'' liability insurance and promote enterprise innovation, it has important theoretical value and policy significance.