What term describes the liability protection that insulates corporate officers from personal liability?

• A. Limited liability
• B. Corporate veil
• C. Piercing the corporate veil
• D. Corporate personality

Answer: (B)

The liability protection that insulates corporate officers from personal liability is the corporate veil. It creates a legal separation between the corporation and those who run it, so most obligations and debts belong to the corporation, not to officers personally. This shield remains in place as long as corporate formalities are observed and there is true separation. When the veil is pierced—such as in cases of fraud, undercapitalization, or commingling personal and corporate assets—personal liability can attach. The other terms describe related ideas but not the protection itself: limited liability is a broader concept of not risking personal assets beyond investment; piercing the corporate veil is the act of overcoming the shield; corporate personality is the notion that the corporation is a separate legal entity, not the protective shield itself.