As the director of your business, you can be held personally liable for many reasons. Allegations can come from a variety of sources - a regulator, your end client, the taxman or even a colleague.
Whereas a company’s shareholders’ liability is usually limited to the value of their shareholding, a director’s liability is unlimited.
If an allegation is made, the defence costs alone could jeopardise a director’s home and other assets.
Claims could come from many people and bodies; there are now over 350 government regulatory agencies and the number of potential offences and wrongful acts is ever increasing.
Directors’ and officers’ protection is often arranged as part of a management liability solution, which can extend cover to include claims brought against the company as well as claims brought against the directors personally.