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Personal Guarantee Insurance — Protecting What You Have Built Outside the Business
Most business lending asks the directors to sign a personal guarantee. If the business cannot repay, the lender can come to you personally, and your home, savings and pension can all be in play.
Personal guarantee insurance covers a large part of that liability if a guarantee is ever called. We work with Purbeck Insurance Services, the specialist in this cover, so our clients can protect themselves when a guarantee cannot be avoided.
What a Personal Guarantee Really Puts at Risk
A limited company normally keeps your personal assets separate from the business. A personal guarantee removes that protection for the debt it covers. If the company fails with money still owing, the lender can call on the guarantee and pursue you directly, and the guarantee survives the company going into liquidation.
Personal guarantee insurance is an annual policy that pays out a set percentage of the guarantee if the lender calls it in after the business fails. It does not remove the guarantee, and it does not cover the whole amount. What it does is reduce the personal exposure to a level most directors can live with, and give you specialist support if trading gets difficult.
Insurance is the second line of defence, not the first. The first is negotiating the guarantee itself: a cap, no charge over your home, a reducing amount as the loan is repaid. Our guide to personal guarantees covers what to ask for before you sign.
How the Cover Works
Secured loans
Guarantees of up to £750,000
80% cover from the start of the policy
Maximum cover of £600,000
Unsecured loans
Guarantees of up to £500,000
Cover builds over time: 60% in year one, 70% in year two, 80% from year three
Maximum cover of £300,000 in year one
What else the policy offers
Up to five directors or shareholders on one policy. Where the guarantee is signed jointly and severally, co-directors can be covered together.
Up to five loans on one policy. Several guarantees can be grouped rather than insured one by one.
Existing guarantees can be covered. If you signed a guarantee on a loan you already have, it can still be insured.
A business expense. Purbeck describes the premium as P11D-neutral, meaning the company can pay it and include it in its accounts, which may reduce Corporation Tax. Confirm the treatment with your accountant.
Monthly or annual premiums. Pay up front or spread the cost across the year.
A helpdesk for difficult times. Policyholders can use Purbeck's business support service if the company runs into financial difficulty, before the guarantee is ever called.
Backed by an A-rated insurer. Purbeck's policies are backed by Markel International Insurance Company Limited.
Cover limits and terms are set by Purbeck and may change. Purbeck will confirm the cover available for your guarantee when they quote.
Why Pinks Works With Purbeck
Our job is to structure finance that protects your future borrowing power. For many directors, the biggest risk in a deal is not the rate. It is the guarantee. Where a lender will not move on it, we want our clients to have a sensible way to limit the damage if things go wrong.
Purbeck Insurance Services specialises in personal guarantee insurance for the directors of UK limited companies and partners in LLPs. They are authorised and regulated by the Financial Conduct Authority, and their policies are backed by Markel, an A-rated insurer.
How the relationship works is simple. We arrange the finance; Purbeck handles the insurance. When you request a quote through our link, Purbeck contacts you directly, discusses your guarantee and, if the cover suits you, arranges the policy. We do not advise on insurance, and the decision is entirely yours. We may receive a payment from Purbeck if you take out a policy, and it does not change the price you pay.
Is It Worth It? An Honest View
Premiums are priced case by case. As a rough guide, Purbeck indicates annual premiums of around 2.5% to 5% of the guaranteed amount, plus a one-off arrangement fee of between £250 and £1,500 per policy. On a £200,000 guarantee, that suggests something in the region of £5,000 to £10,000 a year, and because the policy is renewed annually, the premium usually falls as the loan is repaid.
It tends to make sense when
the guarantee is large relative to your personal assets, or supported by a charge over your home
the lender would not cap or limit the guarantee
the borrowing funds growth with real execution risk, such as an acquisition or a new site
a co-director or family member would otherwise carry most of the practical risk
It makes less sense when
the guarantee is small and capped, and you could meet it from savings
the business is already in difficulty, since the premium adds cost and the underwriting looks at current trading
a different structure, such as asset or invoice finance, would avoid the guarantee altogether
Remember that the cover is a percentage, not the whole guarantee. At 80%, a £200,000 guarantee leaves £40,000 still at risk. The insurance turns a potentially life-changing liability into a manageable one; it does not make the guarantee disappear.
How to Get a Quote
Get your loan offer first. Purbeck recommends looking at cover once you have a loan offer, so the quote reflects the actual guarantee.
Complete the application. Use the button below to reach Purbeck's online application, or ask us for the paper form.
Speak to Purbeck. They aim to contact you within 24 hours, and may ask for recent management information to assess the business.
Decide. Straightforward cases can be in place within hours. There is no obligation to go ahead.
Frequently Asked Questions
Who can take out personal guarantee insurance?
Directors of UK limited companies and partners of limited liability partnerships who have signed, or are about to sign, a personal guarantee for business borrowing.
What types of finance can be covered?
Guarantees on a wide range of business lending, including unsecured and secured loans, overdrafts, asset finance, invoice finance and commercial mortgages. Purbeck will confirm whether a particular guarantee is insurable.
Does the policy cover 100% of my guarantee?
No. Secured loans are covered at 80% from the start. Unsecured loans start at 60% in year one, rising to 70% in year two and 80% from year three. The remaining balance stays your responsibility.
I signed a guarantee last year. Is it too late?
Not necessarily. Purbeck can insure guarantees on existing loans. They will look at how the business is trading now, so it is better to ask while things are going well.
Can the company pay the premium?
Purbeck describes the premium as a P11D-neutral business expense that the company can include in its accounts, which may reduce its Corporation Tax bill. Tax treatment depends on your circumstances, so confirm it with your accountant.
Does using Pinks cost me anything extra?
No. Purbeck quotes and prices the policy directly. We may receive a payment from Purbeck if you take out cover, and it does not change the premium you pay.
Should I insure the guarantee or try to avoid it?
Try to reduce it first. A capped, unsupported or reducing guarantee, or a structure that needs no guarantee at all, is usually better value than insuring a wide one. Where the guarantee cannot be improved, insurance is a sensible next step. We look at both when we structure a deal.
Personal guarantee insurance is provided by Purbeck Insurance Services, which is authorised and regulated by the Financial Conduct Authority. Policies are backed by Markel International Insurance Company Limited. Pinks Associates Limited introduces customers to Purbeck and does not advise on or arrange insurance. Pinks may receive a payment from Purbeck if you take out a policy. Cover is subject to Purbeck's underwriting, terms and exclusions. Pinks Associates Limited is a credit broker, not a lender. Information correct as at November 2026.