Personal Guarantee Insurance PGI

Personal Guarantee Insurance (PGI) provides insurance for individuals (usually Directors) who have given a Personal Guarantee to a lender in respect of the borrowings of the Limited Company.

The insurance policy indemnifies the individual (Director) in the event that the Limited Company becomes insolvent and the personal guarantee is called upon by the lender (usually where the Limited Company is unable to pay back its borrowings).

PGI is available against a number of Limited Company borrowings:
 
Invoice finance

Asset based lending

Commercial finance

Other secured borrowings

Unsecured borrowings

Peer-to-peer loans

How it works:

The level of cover is varied as to whether the underlying finance facility is secured or unsecured. Unsecured cover works as a fixed percentage of the personal guarantee amount and would progress as follows:

Year one: 60%
Year two: 70%
Year three and thereafter: 80%

Secured risks work slightly differently. The policy will cover 80% of
whatever amount Purbeck agree as settlement on behalf of the policyholder with the lender, up to 80% of the guarantee amount. For example:

£100,000 personal guarantee

Purbeck agree a settlement of £50,000 with the lender Purbeck pay £40,000 and the policyholder pays £10,000.

The annual premium is calculated based on the applicant circumstances and the individual requirements of the applicant. Successful applicants will have a choice to pay the premium upfront in full or via a monthly direct debit installment facility.