Directors and officers may be held personally liable for negligence, actual or alleged, to any parties suffering damage, including shareholders. The law provides protection to shareholders by limited liability companies but no protection is provided to decision makers employed by the company. Actions in the past have been few because they were costly and difficult to pursue, the new Companies Act however has changed this completely, the Act is specific on the circumstances that directors and officers can be held liable, including criminally liable.
Unlike amendments to the Companies Act, the Consumer Protection Act has been given a lot of press. As with the Companies Act, in the past, actions against anyone in the supply chain and service providers were costly and difficult to pursue. The new Act makes companies strictly liable for what they sell or the services they provide, defences are few and the consumer can hold anyone in the supply chain liable, jointly or severally.
Your broker needs to understand how liabilities can attach to you and your business and arrange the right insurances.
This post was written by Shado