Beware: The Corporate Veil is Not Impenetrable!

Officers and Directors of a company (or Managers of an LLC) may be held individually liable for damages where their negligent acts or omissions lead to personal injury or property damage. Recent California cases have held that: (1) agents are liable for their own torts; (2) when an agent is a corporate officer, they can be held personally liable for their tortious conduct, even though they do not participate in it, so long as their decisions directly lead to a plaintiffs harm; and (3) agents that negligently undertake a duty to perform actions that the agent should have known are necessary for the protection of third parties can be held personally liable for their negligent undertaking. Individual liability may occur in various scenarios, such as where an officer undertakes a duty to maintain a safe working environment, the officer may be held individually liable where his or her failure to perform a duty results in injuries to persons or property.

Aside from taking precautionary actions to minimize an officer’s risk, increasing general liability insurance limits should be considered by officers and directors of companies that conduct risky enterprises.   To learn more about Office and Director individual liability and to ensure that your business is properly formed to minimize your legal risk contact the Business Law Attorneys at Chauvel & Glatt.

The material in this article, provided by Chauvel & Glatt, is designed to provide informative and current information as of the date of the post. It should not be considered, nor is it intended to constitute, legal advice or promise similar outcomes. For information on your particular circumstances, please contact Chauvel & Glatt at 650-573-9500. (photo credit: depositphotos.com).

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