Can a company indemnify its director against potential liability?

Yes. A company can lend, (subject to some specified terms, below), funds, to a director for meeting expenditure incurred or to be incurred by him in defending criminal/ civil proceedings in connection with any alleged negligence, default or breach of duty/ trust by the director in relation to the company. This is to enable the director to avoid incurring such expenditure.

Specified terms: The loan must be repaid to the company / or any liability of the company must be discharged if in the event that the director is convicted in the proceedings, or judgment is given against him in the proceedings, or the court refuses to grant the director relief.