Member of BTG Global Advisory

Personal Guarantee Insurance (PGI) is designed to offer some financial protection if you have provided a personal guarantee for company loans. Intended to offset your personal financial risk by providing cover for a proportion of the amount guaranteed, the availability of this type of insurance can make the decision to offer personal guarantees a little easier for directors.

When signing a personal guarantee, it may feel like there is little risk of it being called upon, but it only takes a problem in your market, or the loss of a key customer, to trigger a downturn in projected sales and incoming cash levels.

Personal guarantees are generally made for a fixed amount  but this could easily increase if interest or other costs are added. What may seem like a good method of obtaining loans for the business can quickly turn into a requirement to sell your family home or other important assets.

That's why we provide a personal guarantee insurance service for company directors through our trusted insurance partner. You can obtain an online quotation and even process your order by using this link

(Please see our terms and conditions at the bottom of the page).

If you wish to discuss PG insurance in more detail, we have licensed Insolvency Practitioners across the UK with whom you can arrange a free initial consultation at your local Begbies Traynor office. Take professional advice on the merits or otherwise of making a personal guarantee, and let us help you decide on the best course of action.

What are the benefits of Personal Guarantee Insurance in more detail?

  • It allows directors to balance their risk evenly, so that no one director is taking on all the uncertainty of guarantees being called upon in the future
  • It can provide the incentive needed to grow the company by borrowing essential monies
  • This type of insurance is flexible, and can be increased if necessary as your business grows
  • Personal Guarantee Insurance provides peace of mind to directors that the full value of their personal asset is not at risk
  • Start-up companies have access to funding that they might not otherwise be comfortable taking on

How much will be covered by PGI?

Cover is often scaled up over a period of time. Initially the cover may be minimal, but will increase to around 90% of the guarantee amount at year five and beyond, with incremental increases in the intervening years.

This policy amount will be based on the level of risk presented to your insurer, for example, the industry in which you operate, your previous history of repayments, and general trading outlook for the future.

The company’s performance and the likelihood of your personal guarantee being called upon by lenders will both come under scrutiny. Insurers will want to make sure that directors have an incentive to ensure the terms of each loan are met, and that the company will do as much as possible to encourage positive cash flow, without removing the element of reassurance when it comes to a director’s personal asset.

The cost of this type of insurance depends on the level of cover required, and the factors mentioned above.

A valuable addition to limited liability

One of the attractions of setting up a limited company is the limited level of liability taken on by directors. Although liability is limited most of the time, there are instances where directors could be required to pay company debts.

As well as allowing greater access to borrowing for limited companies, personal guarantees are attractive to lenders as they offer protection for their money even when the company is under intense creditor pressure. A lower rate of default is also likely on the part of the company.

Begbies Traynor is the UK’s market leader in corporate recovery and can offer professional advice on whether Personal Guarantee Insurance would suit your needs. Just contact a member of our expert team to discuss your situation.

*Terms and Conditions
By clicking this link it will take you to the Quote & Buy website of PGI Cover a trading style of Ratae PGI Ltd an appointed representative of Professional Insurance Agents Limited also t/as Business Insurance 24/7 who are authorised and regulated by the Financial Conduct Authority. Professional insurance agents limited also t/as Business insurance 24/7 will be able to help and quote you on various insurance products – we, Begbies Traynor Group, do not offer advice or services in this area of insurance.

Contact our team

Latest News
York taxi company placed into administration
York taxi company placed into administration
On 25th November 2016, Rob Sadler and Dave Broadbent of Begbies Traynor in York were appointed as joint administrators of Six Five Nine Cars Ltd. The business, which has traded in York for over 15 yea…
40 jobs saved as gaming retailer sold out of administration
40 jobs saved as gaming retailer sold out of administration
Administrators of a South West-based gaming retailer have succeeded in saving 40 jobs at the company after securing the sale of the business, including 12 out of 15 of its High Street stores. Business…
Nearly 100 jobs saved as bars and restaurants are sold out of administration
Nearly 100 jobs saved as bars and restaurants are sold out of administration
Almost 100 jobs have been saved by the successful sale out of administration of a number of Midlands bars and restaurants. Town and Country Inns plc appointed business recovery and rescue specialists …
Begbies Traynor opens new office in Taunton
Begbies Traynor opens new office in Taunton
The UK's leading independent business recovery practice, Begbies Traynor, has opened an office in Taunton.  The move will enable the firm to build on work it has already done in the town and with the…
Brexit uncertainty puts the brake on London businesses
Brexit uncertainty puts the brake on London businesses
New research reveals that British businesses from Land's End to John o' Groats have shown surprising resilience since the EU Referendum result was announced, with levels of financial distress falling…
UK businesses remain resilient in the face of Brexit
UK businesses remain resilient in the face of Brexit
UK businesses across nearly every sector of the economy were showing positive signs of stability following the EU Referendum, new research from Begbies Traynor, the UK’s leading independent insolven…

Advice You Can Trust

Insolvency Practitioners Association Institute of Chartered Accountants in England and Wales R3: Association of Business Recovery Professionals ICAEW Business Advice Service Turnaround Management Association ACCA (the Association of Chartered Certified Accountants) ICAS | The Institute of Chartered Accountants of Scotland