PERSONAL GUARANTEE INSURANCE

In these challenging times for businesses, we focus on Personal Guarantee Insurance and how it can protect your business and personal finances.

Mark Brannon, Commercial Director at Towergate Insurance Brokers writes: 

A condition of raising business finance will often mean directors of companies being required by lenders to provide additional security in the form of Personal Guarantee. In doing so, the director is putting his or her personal estate at risk. 

Despite the best intentions of directors, things can go wrong. Circumstances outside their control such as the failure of customers and suppliers, regulatory changes or macroeconomic factors can lead to businesses becoming insolvent. If this happens a lender can call on the Personal Guarantee to recover some of the shortfalls due on the outstanding finance obligation.

Personal Guarantee insurance is an annual insurance policy that provides directors with cover in the event the lender calls on their Personal Guarantee following insolvency.

Personal Guarantee insurance can provide significant financial help by preventing the loss of personal wealth. Personal Guarantee Insurance has been designed to give directors the confidence to do business, focus on growth objectives and protect their personal estate. It is available for Personal Guarantees against a wide range of business loans:

Secured Loans 

Where the lender has a charge, debenture or right of title against business assets, these loans typically include: 

• Asset Finance
• Commercial mortgages
• Invoice finance
• Other secured loans Maximum cover is £400k 

Unsecured Loans 

Where the lender does not have a charge, debenture or right or title against business assets, these loans typically include:

• Credit cards
• Overdrafts
• Peer to peer loans
• Short-term working capital loans
• Other unsecured loans Maximum level of cover is £300k

Key features include: 

• Competitive premiums and cover across a wide range of business loans from an A rated leading insurer 
• Cover is available for existing or new Personal Guarantees, multiple Personal Guarantees and one or more guarantors
• Annual or monthly payment options available

If you would like to know more about how Personal Guarantee Insurance can protect you and your business, contact your usual Towergate Insurance Brokers advisor. Find out more about Towergate Insurance HERE!