📈 Sri Lankan Board Directors Face Rising Personal Liability Risks in 2026

A perspective from Delmege Insurance Brokers highlights growing personal accountability for corporate leaders under strict regulatory and digital shifts. • Core Governance Risks: • PDPA No. 9 of 2022: Regulators evaluate board oversight after data breaches; Directors can face personal liability even via third-party service vendor breaches. • Companies Act No. 7 of 2007: Mandates due care and diligence under Sections 198 & 220. Serious breaches carry personal fines, non-indemnifiable penalties, and potential disqualification. • Cyber & Reputational Threats: Rising incidents of ransomware and phishing expose Directors to direct shareholder and regulatory legal action. • Corporate Protection Gaps: • Company indemnification has statutory limits and fails if the firm becomes insolvent or if prohibited by law. • Former Directors remain personally exposed to legal costs and settlements post-tenure. • Mitigation & Market Data: • Adoption of Directors' & Officers' Liability Insurance and Cyber Insurance is critical to mitigate legal defense costs and operational disruptions. • Insurance Sector Context: Delmege Insurance Brokers ranked No. 1 by Gross Written Premium (GWP) in Sri Lanka among over 80 registered brokers for both 2023 and 2024 (IRCSL data).