What is a personal guarantee and why you should insure it
Posted on 12th Nov 2015 12:32:59 in Personal Guarantee Insurance
A personal guarantee is usually an unsecured written promise made by a specific person usually a director or other executive or limited liability company, to be known as the guarantor and to accept responsibility for some other party's debt (the debtor) in the event the debtor fails to pay it.
It is often required by a lender as additional security to any other collateral offered by the borrower. It is often required from owners of small to medium sized businesses. The rational being, if the owner of the business is not willing to lift the veil of incorporation, why should I back it.
As well as for lending it is often required to back up a lease.
These can be onerous obligations. No Personal Guarantee should ever be signed without taking independent legal advice.
If you are willing to sign a PG, and you have given one or are to give one to a lender, you may be able to insure your liability under the PG.
If your lender has lent money, taken security for that lending and taken a PG, then we can insure it.
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