The Personal Liability Problem for International Directors
Taking a board seat in a foreign company is one of the more consequential financial decisions an internationally mobile executive or investor can make. Company law in most jurisdictions imposes personal liability on directors for a wide range of acts and omissions: breach of fiduciary duty, wrongful trading, failure to comply with local regulatory obligations, misrepresentation to shareholders or lenders, employment law violations by the company, and environmental breaches are among the most common.
Crucially, this personal liability is not extinguished by the fact that the director is a foreign national who lives elsewhere. Courts in the UAE, Germany, Singapore, the United States, and most other major commercial jurisdictions have well-established mechanisms for pursuing foreign-resident defendants. Assets held in the director's home country — property, investments, savings — can be at risk if a foreign court obtains a judgment and that judgment is enforceable in the director's home jurisdiction (which, under most bilateral treaty frameworks, it often is).
Directors' and officers' (D&O) liability insurance exists to transfer this personal liability risk. For expat directors, getting it right is not a luxury — it is one of the most important protection decisions they will make.
What D&O Insurance Covers
A standard D&O policy covers three broad areas, typically described as "Side A", "Side B", and "Side C":
Side A — Personal protection for directors and officers. This is the most important element for individual directors. Side A covers the personal legal costs and any damages or settlements arising from claims made against a director personally, where the company is unable or unwilling to indemnify them. Inability might arise because the company is insolvent; unwillingness might arise in shareholder derivative suits where the company itself is the claimant.
Side B — Corporate reimbursement. Where the company does indemnify the director from its own funds, Side B reimburses the company for those payments. This protects the company balance sheet rather than the director personally, but it means the director can accept company indemnification without worrying that the company is financially exposed.
Side C — Entity cover. Some D&O policies extend to cover the company itself in securities claims. This is most common in US-listed companies and is less relevant for private companies or smaller entities.
For expat directors, the critical piece is Side A: personal, ring-fenced protection that responds even when the company is in difficulty or actively working against the director's interests.
Why Cross-Border Directorships Create Particular Risk
Expat directors in overseas companies face a combination of risks that their domestically based counterparts typically do not.
Unfamiliar legal systems. A British director on the board of a UAE company is operating under UAE Companies Law, UAE Commercial Code, and sector-specific regulations administered by authorities such as the DIFC, ADGM, or onshore UAE regulators. These frameworks impose specific duties that differ from UK company law, and ignorance is no defence.
Regulatory enforcement in multiple jurisdictions. As of 2026, regulators in financial services, environmental compliance, data protection (particularly GDPR), competition law, and anti-bribery enforcement frequently pursue directors across borders. A director resident in Switzerland but serving on a UK-registered subsidiary can find themselves subject to UK regulatory proceedings and, potentially, parallel proceedings in Switzerland.
Insolvency risk in overseas subsidiaries. Expat directors are sometimes placed on the boards of overseas subsidiaries or joint ventures that carry higher insolvency risk than the parent. If the subsidiary enters insolvency, local insolvency practitioners and creditors will scrutinise directors' conduct closely. The parent company may not indemnify directors of the subsidiary, leaving them personally exposed.
Language and documentation risk. Board minutes, resolutions, and regulatory filings in a foreign language create the risk that a director inadvertently approves something they do not fully understand, or that a translation error creates a record inconsistent with what was decided.
Targeted claims by local creditors, partners, or shareholders. Joint venture structures — common in the Middle East, Southeast Asia, and parts of Africa — sometimes break down acrimoniously. Local partners in a JV dispute may bring claims against foreign directors personally as part of their litigation strategy, knowing that an individual director is more exposed than a well-resourced corporate parent.
The Gap Between Company Cover and Personal Protection
Many expat directors assume that the company on whose board they sit will provide D&O cover. This assumption deserves careful examination.
First, not all overseas companies purchase D&O insurance at all. In many developing markets, D&O insurance penetration remains low, and the company may regard it as an unnecessary overhead.
Second, where the company does purchase D&O cover, the policy may be placed with a local insurer using a local policy wording that has material differences from international-standard Lloyd's-market policies. Coverage exclusions, sublimits, and claims-notification procedures that seem acceptable under local norms may leave significant gaps.
Third, Side A cover — the element that protects the director personally when the company is unable or unwilling to indemnify — is sometimes inadequate or absent in locally placed policies.
Fourth, if the company is the claimant in a derivative action against the director, the company-purchased D&O policy may not respond at all for the director's defence costs, because the insurer takes the view that the company (the policyholder) and the director (the insured person) are adverse parties.
The solution for expat directors who cannot verify the adequacy of company-purchased D&O cover is to hold independent, personal D&O cover — sometimes called a "Difference in Conditions" or Side A DIC policy. This provides coverage that fills the gap between what the company's policy provides and what the director actually needs.
Key Policy Features to Check
Whether reviewing company-purchased cover or procuring personal cover, the following features are critical for expat directors:
Worldwide territorial scope. The policy must respond to claims wherever in the world they are brought, not only in the jurisdiction of incorporation.
Adequate limits. D&O limits should reflect the size and complexity of the company and the potential scale of claims. Regulatory proceedings in financial services, competition law, or environmental enforcement can generate defence costs running into millions before any judgment is reached. As of 2026, minimum limits of $5 million to $10 million are commonly recommended for directors of any company of meaningful size; for listed companies or regulated financial institutions, $50 million or more is not unusual.
Severability of the insured persons clause. This ensures that misrepresentation or wrongdoing by one director does not void coverage for all other directors on the same policy. Especially important in joint venture structures where you may not control what co-directors disclose.
Run-off cover. When a director leaves a board, they remain liable for their actions while on the board. Run-off cover (typically for six years following departure, matching most statutory limitation periods) should be either automatically included or explicitly negotiated.
Regulatory investigation cover. Regulatory investigations generate large professional costs even when they result in no penalty. The policy should cover defence costs from the first notification of a formal regulatory inquiry, not only after formal proceedings are commenced.
Representation costs for extradition or criminal investigations. In some jurisdictions, directors of failed companies face criminal as well as civil exposure. While D&O policies do not cover criminal fines, they should cover legal representation costs for criminal investigations.
Jurisdictions That Warrant Particular Attention
Certain jurisdictions present heightened D&O risk for expat directors and warrant specific attention when placing cover.
United States. US securities litigation, shareholder class actions, and SEC/DOJ enforcement are among the most expensive legal environments in the world. Any director of a company with US-listed securities, significant US operations, or US shareholders should ensure their D&O cover specifically addresses US risk and carries limits commensurate with US litigation economics.
United Kingdom. Post-2016 legislative changes to insolvency law have widened director liability for wrongful trading, and the FCA is an active and well-resourced regulator. UK pension trustees and directors of companies with defined-benefit pension schemes face particular regulatory exposure.
UAE. UAE Commercial Companies Law 2021 (Federal Decree Law 32 of 2021) imposes duties of care and loyalty on directors, and enforcement has become more active. DIFC and ADGM companies are subject to their own company law frameworks, which more closely resemble English law.
Germany. German company law imposes a high standard of care on Geschäftsführer (managing directors) of GmbHs, and personal liability in insolvency scenarios is well established.
Singapore. The Companies Act imposes stringent duties on directors, and the Singapore courts have shown willingness to pierce the corporate veil in cases of director misconduct.
Practical Steps for Expat Directors
Before taking up a new directorship, or as part of an annual review of your protection arrangements:
- Request a copy of the company's D&O policy and review territorial scope, limit of indemnity, exclusions, and run-off provisions.
- Check whether the company's indemnification deed covers you for legal costs in the event of a claim, and whether the company has the financial capacity to honour that commitment.
- Consider personal Side A DIC cover if the company policy has gaps or if you have doubts about the company's financial stability.
- Review run-off provisions before resigning from any board.
- Obtain independent legal advice in the jurisdiction of your directorship on your specific duties and personal liability exposure before your first board meeting.
- Keep clear personal records of board decisions and your own position on matters where you had concerns. In the event of a claim, your personal notes and any dissenting votes recorded in minutes are important evidence.
Coordinating D&O with Other Personal Protection
D&O insurance for expat directors does not operate in isolation. It should be considered alongside:
- Professional indemnity insurance, if the directorship involves the exercise of a regulated profession.
- Personal accident and life insurance, which should be reviewed whenever a new directorship materially changes your risk profile.
- Wealth structuring, including review of which personal assets are held in joint names or trust structures that may affect enforceability of judgments against you personally.
How Global Investments Can Help
Global Investments advises internationally mobile individuals and business owners on the protection and financial planning decisions that come with managing complex, cross-border lives. For clients who hold directorships in multiple jurisdictions, ensuring that personal D&O cover is genuinely adequate — not merely technically in place — is one of the most important conversations we have.
Our team can review existing D&O arrangements, identify gaps created by cross-border exposures, and coordinate with specialist liability insurance brokers to source appropriate cover. We also work with clients to integrate their D&O protection into a coherent overall picture that includes life assurance, income protection, and wealth structuring.
Contact us to arrange a director liability review tailored to your specific board positions and jurisdictions.
This guide is for general educational purposes only and does not constitute legal, regulatory, or insurance advice. Company law, D&O policy terms, and regulatory requirements vary significantly by jurisdiction. Always seek qualified legal and insurance advice specific to your directorships and personal circumstances. Rules and regulations may change.
This guide is for general information only and does not constitute financial or insurance advice. Policy terms, premium rates, and insurer eligibility criteria change — always verify current terms with a qualified independent adviser before taking out any policy.