If you are giving a personal guarantee, Personal Guarantee Insurance can protect part of your personal liability if the guarantee is ever called on. It is an important form of cover that many business owners have never heard of.
Personal Guarantee Insurance is a policy taken out for the guarantor, rather than the business. If the borrower defaults and the lender makes a demand under the guarantee, the policy pays out a proportion of the guarantor’s liability. It helps protect your personal assets, including your home, if a project does not go to plan.
Most guarantees given to bridging lenders are unlimited. Even a well-planned transaction can be affected by delays, a fall in values or an exit that takes longer than expected. Personal Guarantee Insurance provides a safety net against that risk, and reassurance for you and your family.
Policies differ in the proportion of liability they cover, the maximum amount payable, when cover begins and what is excluded, so the terms need to be read carefully. Cover must be in place before any difficulty arises, as a guarantee cannot be insured once the borrower is in trouble. If you would like cover, please allow at least two weeks before completion to arrange it.
Please speak to one of our team. We can talk you through how Personal Guarantee Insurance works and introduce you to a specialist provider, who will advise you on and arrange a suitable policy. If you take out a policy following our introduction, we may receive a commission from the provider, and we will tell you about this before you proceed.
This guide is general information only and is not financial or legal advice.
We welcome every enquiry. With access to a wide panel of specialist lenders, it is always worth a conversation to see how we can help.
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