Personal Guarantee Insurance:
Protecting what you've worked hard to build
If you've signed a Personal Guarantee, you may be wondering what protection is available. We've partnered with Purbeck Insurance to help you explore whether Personal Guarantee Insurance could be right for you.
You’ll be taken to Purbeck Insurance, who will talk you through your options directly.
What is a Personal Guarantee?
A Personal Guarantee is a commitment that may be required when taking out business finance. It means that if the business becomes insolvent and cannot repay the outstanding debt, the lender will ask the director to repay what is owed using personal assets.
What protection could be available?
If you've signed a Personal Guarantee, insurance could help protect your personal finances if your business becomes insolvent and your lender calls on that guarantee. We work with Purbeck Insurance, a specialist provider, so you can explore whether this type of protection could be right for you.
Key features include:
Cover of between 60% and 80% of the Personal Guarantee, depending on the type of finance being insured and the risk associated.
Cover of up to £750,000 for secured loans and £500,000 for unsecured loans.
Unlimited access to a dedicated Business Support Service should your business face financial difficulties.
Up to £10,000 towards a professional Debt Negotiator to arrange settlement with the lender on your behalf.
The ability to cover multiple directors under one policy at no extra cost if the Personal Guarantee is signed on a joint and several liability basis.
The ability to cover multiple Personal Guarantees under one policy.
Personal Guarantee Insurance may be available for a wide range of business finance products, such as unsecured loans, overdrafts, invoice finance, asset finance, commercial mortgages, development finance, and more.
If you'd like to understand what cover may be available for your situation, Purbeck can talk you through your options directly.
Who can apply?
Personal Guarantee Insurance may be available to directors of limited companies or partners of limited liability partnerships based in the UK. It can also be considered for a wide range of business loans, including asset finance, commercial mortgages, invoice finance, overdrafts, peer-to-peer loans, and other secured or unsecured loans.
If you’re unsure whether your loan or guarantee could be covered, the best next step is to speak directly with Purbeck Insurance.
Frequently asked questions
Personal Guarantee Insurance is provided by Purbeck Insurance Services and backed by Markel International Insurance Company Ltd. With more than 90 years of experience and strong ratings from independent agencies, including A.M. Best (A), Fitch (A+) and S&P (A), you can feel confident that you're speaking to an established and trusted provider.
Purbeck can cover Personal Guarantees attached to a wide range of business loans, including asset finance, commercial mortgages, invoice finance, overdrafts, peer to peer loans, and other secured or unsecured loans. If in doubt, we would recommend speaking with a member of the Purbeck support team to see if your current requirement is insurable.
Purbeck offer a maximum level of cover of £750,000 for secured loans and £500,000 for unsecured loans.
You may still be able to explore cover even if you’ve already signed a Personal Guarantee, as cases can be considered retrospectively. This may be especially worth looking into if you still have a significant amount outstanding on your loan.
No problem! You can add up to five directors to one policy at no extra cost if the Personal Guarantee has been signed ‘jointly and severally’.
Purbeck can group certain Personal Guarantees together on one policy. If you have two Personal Guarantees attached to secured lending, for example, you could have one policy that covers them both.
Personal Guarantee Insurance is an annual policy. Every year, the Purbeck team will contact you to discuss your requirements and provide a new 12-month premium that reflects your current Personal Guarantee amount. Typically, as you pay down your loan, the amount insured reduces, and your premium may reduce too.
The cost of cover is based on your individual circumstances, so it's difficult to provide an exact figure. As a guide, premiums are typically between 2.5% and 5% of the Personal Guarantee amount.
Not necessarily. You can either pay the full amount upfront or spread the cost over the year through Direct Debit (charges apply).
Purbeck charge an arrangement fee of between £250 and £1,500 per policy. The fee must be paid up front, within 30 days of the policy inception.
We would recommend that you investigate Personal Guarantee Insurance once you have secured a loan offer. You will then be in the best position to provide the most accurate information regarding your loan and also receive the most accurate premium rates and information from Purbeck, avoiding any changes that may occur if you get in touch too soon.