Becoming a director of an existing company

A friend is in the enviable position of being offered a role with a successful small business.

The role is quite senior and will require them to be a company director (they need to hold certain licences which the company currently doesn't hold). No investment in the business is required.

The role will be for a short period only.

Will they be required to take out director's insurance or other protections to cover their own assets (it's not practical to move the house or super or other assets to a trust for such a small role).

Even if they aren't part of the main business activities - is there a way to limit their liability should the company fail for activities outside of the remit?

 

Ensure the company has D&O insurance and request company indemnify him against claims for a start, though I'd be seeking paid advice on this...not sure if you can totally de-risk.

 

no requirement for insurance.
No way to limit their liability either other than to make sure the company acts appropriately

 

A former Director can be, or remain liable, for acts prior to, while they were a Director and to some extents, afterwards.
Management Insurance that also includes Directors liability can be a prudent safety net for the acts of others upon a Director but as terry says one way to mitigate some of the risk is to act appropriately. But this wont mitigate all the risk. eg The company has unpaid employee super. A criminal proceeding for environmental, workplace safety etc. Even traffic red light and toll offences.

Management Liability Insurance Quotes in Australia| BizCover