Generally, it is paid by the company itself because directors' actions are considered as actions on behalf of the company. The company, being the principal, is solely liable for that. Therefore, the direct impact of a director's actions falls on the company, which is why the company takes Directors & Officers (D & O) insurance. Additionally, I have observed in many cases directors also opting for D & O insurance. This decision may stem from their concern that certain aspects within the company are not functioning properly, and they could potentially face personal liability under the Companies Act.
For more information, you can visit the website below.