Personal Insurance Bristol

A lack of personal insurance to protect against new tighter regulations is leaving employers at risk of losing everything, experts warn.

As UK and European Union regulations on businesses have tightened in recent years, more and more successful legal action against directors and officers of UK limited companies is claiming their assets.

Though most company directors obtain limited liability insurance, many are ignorant to rules allowing them to be sued as a private individual for decisions they make on behalf of the company.

A successful lawsuit can often result in a loss of all their personal possessions, including their home and savings.

"Today's blame culture means that bosses have never been more at risk," said Martin Nugent, spokesman for UK & Ireland Insurance Services.

Over 200 new offences spawned from the UK Companies Act of 1985 and 1989 for which company directors and officers can be prosecuted, such as errors of judgement and unwise investment decisions.

Organisations such as the Department of Trade & Industry (DTI), the Companies Investigation Branch (CIB) and the Office of Fair Trading (OFT) also have the power to carry out dawn raids for which directors can be jailed if they refuse to cooperate.

"It's easy for people to make a complaint and most of our insurance pay-outs cover the costs of investigations which often run into thousands," Nugent added.

"Directors need to work with a professional insurance broker to ensure that they have adequate cover in place."