Personal Guarantee Insurance

Personal guarantee Insurance provides cover for directors who have signed PGI documents, usually for the purposes of securing business finance.

When a limited company wishes to borrow money, it is customary for financial institutions to request a directors personal guarantee should the company become insolvent.

PGI insurance is a relatively new product but an extremely useful safeguard in the event of insolvency.

Definition

Personal Guarantee Insurance is an annual insurance cover offering up to 80% protection.

Should the directors company enter insolvency, the insurance can prevent director losing their house, which is obviously an extremely stressful event.

The cost of the PGI can be paid for by the limited company.

How Does Personal Guarantee Insurance Work?

PGI doesn’t cover 100% of the loan amount but usually 60% initially, then rising to 80% after 5 years.

It can be taken out for either an existing guarantee or a brand new one.

How Much Does it Cost?

Like all insurance, the premium depends on the level of risk. In this case, the main variables are the amount of the personal guarantee and the length of cover.

We are partnered with Purbeck Insurance to offer this and their annual policies range from about £750 pa to £12000.