Personal Guarantee Insurance

When signing a Personal Guarantee against a business loan, you may be putting your personal assets at risk. Taking out personal guarantee insurance means that much of this risk can be minimised. Find out more below:

What is Personal Guarantee Insurance (PGI)?


Personal guarantee insurance offers cover for individuals who have signed a personal guarantee on a new or existing loan. The policy protects the guarantor in the case of the loan being called in. Typically, the loan is guaranteed by the individuals’ personal assets i.e. a house.

personal guarantee insurance
 

Why do I need it?


If the worst happens, this is where Personal Guarantee Insurance (PGI) can help.

For example, if your business has no assets and is looking to raise finance, the bank or finance provider is likely to request that a personal guarantee is signed.

The catch is that by signing a personal guarantee, the personal estate of the director can be placed at risk. In these circumstances, personal guarantee insurance could offer the peace of mind to go ahead and obtain the finance your business needs. In most cases, signing a personal guarantee can be the difference between securing the SME finance or not.

The problem is that despite the best intentions of the company directors, things can sometimes go wrong – things which are often outside of your control, such as the business failure of key customers or suppliers.

In the unfortunate event the business becomes insolvent, the lender may call on the personal guarantee to recover any shortfalls due on the outstanding finance obligations that the business owes to the lender. This could result in a company director losing their home, as well as leading to personal insolvency.

 

How does it work?


Personal Guarantee Insurance has been designed to give company directors confidence to do business and focus on growth objectives.

This is an exclusive product backed by ‘A’ rated insurers*.

The annual premium is calculated based on the individual circumstances and requirements of the director. The level of cover of is based on a fixed percentage that the director wishes to insure and this increases for each year that the policy is in place:

  • Year one: 60%
  • Year two: 70%
  • Year three and thereafter: 80%

 

How much does Personal Guarantee Insurance cost?


As with any insurance policy, the cost is dependent on several factors:

  • The amount of money being guaranteed
  • The financial situation and stability of the company
  • Timeframe

Depending on the above, premium’s can vary from £750 per year, up to around £12,000.

For an accurate quote, please click on the following link and/or call us on 01827 313 931 to go through the process in person, and we will be very happy to discuss your exact requirements.

www.purbeckinsurance.co.uk/apply/personal-details?brokerid=8#

*Prizm Solutions have partnered with Purbeck Insurance Services, a trading name of Purbeck UK Limited, who exclusively offer Personal Guarantee Insurance (PGI) on behalf of Markel International, an A-rated fortune 500 insurance company.

Whether you are a manager, a director or proprietor of a business – you can be assured of our expert advice and knowledge of this business sector. We are an award winning insurance broker in Tamworth, with a fantastic team of enthusiastic insurance specialists.  We serve clients from across the Staffordshire and West Midlands region and throughout the UK.

If you would like any further information, simply fill in the form below and we’ll be in touch as soon as we can!