Personal Guarantee Insurance

Lenders rarely offer the total amount of your personal guarantee. They do this to ensure you remain dedicated to repaying the corporate loan to your lender at term and to mitigate their own risk. However, personal guarantees can be covered by up to 80%, although it may be less if there are circumstances which would make an insurer want to cover less of your personal guarantee. Risk, loan amount, your business’ operations and your reasons for raising finance will also influence how much an insurer will cover.

What your cover will cost will depend on how much your company is borrowing, the financial position and track record of your business, your company’s set up and the length of your loan. The more liquid your company and the better its financial outlook, the less Personal Guarantee Insurance is likely to cost. 

Significant Personal Guarantee Insurance is available for substantial corporate loans with large personal guarantees, and these will typically be more expensive than you’d pay for a smaller loan.

Yes, you can get insurance for being a guarantor. Personal guarantee insurance helps protect you from the financial risks associated with being a guarantor on a loan. If the borrower defaults, the insurance can cover the debt, safeguarding your personal assets. Contact Enness for expert advice on the best options available.

A personal guarantee is a legally binding agreement where a business owner or director pledges their personal assets to secure a loan for their company. If the business defaults on the loan, the individual is personally liable to repay the debt, which can include assets such as property, savings, or investments.

This type of guarantee is typically required by lenders when a business is deemed high-risk or does not have sufficient collateral. It ensures that the lender has a secondary form of repayment if the company cannot meet its obligations. However, it also exposes the guarantor to significant financial risk, making it important to consider protective measures such as Personal Guarantee Insurance.