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Protecting the founder personally
When you sign a personal guarantee for a business loan, lease or facility, you hand the lender a claim on your own money — usually your home — if the company can’t pay. It quietly undoes the whole point of a limited company. Personal guarantee insurance pays a large share of that guarantee if the worst happens, so a business setback doesn’t become a personal one.
Related guide: founder insurance
In short
Personal guarantee insurance (PGI) covers a proportion of a personal guarantee you’ve given for your business — on a loan, lease, overdraft, invoice or asset finance — if the company defaults and the lender comes after you personally. It protects the founder’s own assets, not the company’s.
A personal guarantee is a promise you make, in your own name, to repay a company debt if the business can’t. Lenders, landlords and suppliers ask directors for them all the time. The catch: a guarantee sits outside your limited company — so if the company fails, the lender can pursue your savings, and often your home, directly.
Personal guarantee insurance pays out a proportion of the outstanding guarantee if it’s called in. It doesn’t stop the company failing — it stops that failure taking your personal assets with it.
Most founders believe “limited” means their personal money is safe. A personal guarantee is the exception that removes that protection — and by the time it matters, the business is usually already in trouble. Points worth knowing:
Cover is set as a percentage of the guarantee, and the proportion typically increases the longer the policy is held — so putting it in place early matters. In practice it can:
The exact proportion, limits and terms depend on the facility, the lender and how long the cover has been held.
Any founder or director who has personally guaranteed — or is about to guarantee — a business debt: a bank loan or overdraft, a commercial lease, invoice or asset finance, a supplier credit account, or borrowing taken on to fund growth. If you’ve signed something in your own name to get the company funded, this is for you.
The guarantees signed and their amounts, the lenders and facilities they relate to, the company’s finances, and how long cover has been held all affect the proportion a policy will cover. It’s a specialist product, quoted by the providers who write it.
It’s cover that pays a proportion of a personal guarantee you’ve given for your business if the company defaults and the lender pursues you personally. It protects your own money — often your home — rather than the company’s assets.
It can reduce the risk. A called-in guarantee can put your home and savings at risk; the policy pays a set proportion of the guarantee, on the policy’s terms, so less of a business failure lands on your personal assets.
Cover is a percentage of the guarantee, and it typically rises the longer you hold the policy — which is why putting it in place early matters. The exact proportion depends on the facility, the lender and the provider. Apex does not arrange personal guarantee insurance; it is sold by specialist providers.
Often, yes. A personal guarantee deliberately sits outside your limited company, so “limited liability” doesn’t protect you against it. If you’ve signed guarantees, the limited structure alone won’t shield your personal assets.
Yes — it’s aimed at founders and directors who’ve signed guarantees. It’s a specialist line, written by a small number of dedicated providers and arranged separately from your main business insurance.
Premiums are often treated as an allowable business expense, but that depends on your circumstances — check with your accountant.
Personal guarantee insurance is a specialist line, written by providers who deal only in it. Talk to us about the founder cover Apex does arrange — D&O and your wider protection — and where a personal guarantee leaves you exposed. Or call 0117 325 0027.
Talk to a broker Call 0117 325 0027Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information, not advice on your individual circumstances, and it does not guarantee that cover will be available or on what terms.
