General - July 5, 2024
Personal Guarantee Insurance: Protect Yourself From Business Debts
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If you’re running a limited business, you want to be protected personally. Risk is part of the job – particularly if you’re a start-up or looking to grow your business through loans or assets – but there are ways to transfer that risk using insurance.

One such opportunity is through Personal Guarantees. Today we’re explaining what they are and the insurance available if you require them.

What are Personal Guarantees?

In simple terms, a Personal Guarantee is a safety net for lenders. It’s a legally binding promise by a business owner (usually a director or partner) to be personally responsible for the business’ debt if it can’t be repaid. 

If things don’t go to plan and the business defaults, the lender can come after the guarantor’s personal assets (like their house) to settle the debt. This could even lead to personal bankruptcy.

So, why do business owners agree to it? Because they believe in their business! Most small organisations aren’t cash rich either, and this guarantee helps them get loans they wouldn’t qualify for otherwise. It’s a way to fuel growth, but it is inherently risky.

Why Personal Guarantee insurance?

Signing a Personal Guarantee for your business loan feels like walking a tightrope – your home and savings are on the line if things go wrong. But what if you could secure funding for growth whilst limiting the risk on your personal assets?

That’s where Personal Guarantee insurance (PGI) comes in. It’s like a safety net for business owners. If your company hits a rough patch and can’t repay the loan, PGI steps in to cover your Personal Guarantee. This protects your family’s financial security and lets you focus on getting your business back on track.

After all, life throws curveballs – a bad market, a lost customer, a key employee on leave… PGI helps you weather these storms without jeopardising your personal wealth. You can even customise the policy to fit your needs, choosing the amount of coverage and including multiple directors.

By investing in PGI, you’re giving yourself peace of mind. Now you can chase your business dreams confidently, knowing your personal finances are protected.

What’s available?

You can get PGI against secured and unsecured loans and cover up to 80% of the risk. The maximum level of cover is £400,000 for secured and £300,000 for unsecured loans. 

Annual policies are available and can be paid monthly if required. However, there are some responsibilities and exclusions to be aware of. We will be posting a separate blog around this shortly.

Get a Personal Guarantee insurance quote with RiskBox

The process is really simple. You just click here to get started with our trusted Personal Guarantee insurance provider Purbeck.

Need help or have any questions? Reach out to the RiskBox team today on 0161 533 0411 or 




Photo by Kelly Sikkema on Unsplash

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