Personal Guarantee Insurance
PGI for secured and unsecured loans



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Personal Guarantee Insurance


Personal Guarantee Insurance (PGI) provides insurance for Directors who have been required to sign a Personal Guarantee to a lender in support of a business loan facility.


The insurance policy indemnifies the individual (Director) in the event the business becomes insolvent and the personal guarantee is called upon by the lender.


PGI is available against a wide range of business loans, including:



Personal Guarantee Insurance is an annual insurance policy that provides Directors with cover in the event the business lender calls on their Personal Guarantee following insolvency.

Key features include:


  1. Competitive premiums and cover available across a wide range of business loans
  2. Insurance available for:
    a. Existing or new Personal Guarantees
    b. Multiple Personal Guarantees
    c. One or more guarantors
  3. Unlimited access to Business Support Services; a group of specialist advisors who are at your side should your business need support
  4. Full quotation in minutes using our online quote and buy system or via telephone with one of our specialist advisors
  5. Insurance policy insured by Markel International,an A-rated leading insurer

personal guarantee insurance

How PGI works


The level of cover is based on a fixed percentage of the Personal Guarantee and depends on whether the Personal Guarantee is signed in support of a secured or unsecured loan.


For Personal Guarantees signed in support of secured loans:



For Personal Guarantees signed in support of unsecured loans:




RLA Capital have partnered with Purbeck Insurance Services, a Managing General Agent who provide Personal Guarantee Insurance (PGI).


By clicking the link above you will be transferred to the website of Purbeck Insurance Services.


The annual premium is calculated based on your individual 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 instalment facility.


Please note, RLA Capital does not offer advice or services in this area of insurance.


Frequently Asked Questions

How are PGI premiums calculated?

The premium is calculated based on 100% of the Personal Guarantee amount.

The base premium rate is between 1.6% - 3.6% per annum and I based on of the following:


  • Business industry sector
  • Business credit score
  • Type of loan facility
  • Balance sheet composition
  • Director declarations
  • Type of lender

The premium is also subject to Insurance Premium Tax (“IPT”).



How does the percentage of PGI cover work?

The policy is designed on a co-insurance basis (i.e. the policy insures a set % of the Personal Guarantee amount).

Whilst the insurance policy transfers the majority of the underlying risk, the Director still retains some “skin in the game”; this is important for other stakeholders of the business.

The level of cover available is predicated on the type of loan facility the Personal Guarantee is attached to:


  • For secured loans, the level of cover available is 80% of the (20% insured contribution)
  • For unsecured loans, the level of cover is predicated on the period of time the policy has been in place, as follows:

- Year one: 60% (40% insured contribution)
- Year two: 70% (30% insured contribution)
- Year three and thereafter: 80% (20% insured contribution)


The premium is calculated based on 100% of the Personal Guarantee amount.



What is the maximum limit of indemnity?

The maximum limit per policy, per company is £400,000 for Personal Guarantees attached to secured loans and £300,000 for Personal Guarantees attached to unsecured loans.



What are the renewal terms, process and reducing balance implications?

The renewal process is as follows:


  • 30 days prior to renewal, the Insured/Broker will receive an automated email informing them of the upcoming renewal date;
  • The email will contain a unique URL link which will enable to Insured/Broker to review the renewal application which is based on the answers provided for the previous year;
  • The Insured/Broker will be asked to re-confirm their details and the automated Individual AML check and company credit score will be reperformed;
  • The Insured/Broker will be invited to review the quote and repurchase the policy (through a choice of payment options)

All things being equal (subject to periodic change), the premium (%) should remain consistent across renewal periods.

Many of the underlying loan facilities that the Personal Guarantee is attached to will reduce over time (as they are paid down), as such, the Insured can insure a reducing amount each year at renewal. This will then have the effect of reducing the premium (£) on renewal.

Equally, where the Insured finances additional funding, this could increase the amount of cover required at renewal; this will have the effect of increasing the premium (£) on renewal.

If the policy is subject to a mid-term adjustment (see mid-term adjustments below), provided the Personal Guarantee is provided in respect of the same underlying business, this will be considered a “renewal”.



What are mid-term PGI adjustments?

For any mid-term adjustments, the Insured and/or Broker should contact Purbeck Insurance to discuss their requirements.

Where a mid-term adjustment is required, the Insured and/or Broker should notify Purbeck Insurance of this as soon as possible.

Mid-term adjustments may alter the premium (£) but Purbeck Insurance will not charge an administrative fee for any amendments to the policy.

Typical mid-term adjustments include (but are not limited to):


  • Change of Insureds or business standing data (name, address, contact information);
  • Change of lender;
  • Change of loan facility;
  • Change of loan term;
  • Change of Personal Guarantee details / amounts;


What if we have multiple directors (joint and several PGs)?

For joint & several Personal Guarantees, a principle Director can elect to include multiple co-Directors on their Personal Guarantee Insurance policy.

Purbeck Insurance Services will then require each additional Director to complete a “Declarations” form and, once the policy has been entered into, Purbeck Insurance Services will then issue a Policy Endorsement which will cover multiple Directors on one insurance policy.

Each Director can then claim on the Personal Guarantee Insurance policy.

There is no additional cost implication for this. The maximum number of Directors on any one policy is 5 Director Guarantors.



How does the location of director and business (i.e. overseas) effect PGI applications?

Businesses must be registered and incorporated in the United Kingdom in order to be eligible for Personal Guarantee Insurance.

However, businesses can have overseas operations provided they are registered and incorporated in the United Kingdom.

Directors can be based in the UK or overseas (subject to the location of the business, as above).



Can you have multiple PGs on one PGI policy?

  1. Multiple Personal Guarantees provided in respect of one business:

Where the Insured has multiple Personal Guarantees provided across one business the Insured would have the following choices:


  • The Insured could take out one Personal Guarantee Insurance policy for each Personal Guarantee provided in respect of the business (hence multiple policies); or

  • The Insured could take out one insurance policy which would cover the multiple Personal Guarantees provided in respect of one business.

Where the Insured wishes to insure multiple Personal Guarantees given in respect of one single business, this is subject to the individual limits of indemnity as outlined in Q3.


A Director Guarantor can insure up to 5 Personal Guarantees per Limited Entity.


  1. Multiple Personal Guarantees provided in respect of multiple businesses (separate legal entities):

Where the Insured has multiple Personal Guarantees provided to multiple businesses (separate legal entities) the Insured would have the following choices:


  • The Insured could take out one Personal Guarantee Insurance policy for each Personal Guarantee (hence multiple policies covering multiple Personal Guarantees across multiple businesses); or

  • The Insured could take out one insurance policy for each business (each separate legal entity) which would cover multiple Personal Guarantee's under each insurance policy.

Where the Insured wishes to insure multiple Personal Guarantees given in respect of one single business, this is subject to the individual limits of indemnity as outlined in Q3.



Does the annual renewal process mirror the initial proposal in terms of application?

Yes, the process at renewal is as follows:


  • The Insured / Broker will receive an email 30 days prior to renewal of the policy inviting them to access their portal
  • The Insured / Broker then reconfirms their original application information (and updates as appropriate)
  • The API to SmartSearch (our online AML check and credit score of the business) is reperformed and the underwriting risk is reassessed
  • All things being equal, there should be no difference in premium (%) at renewal (despite the Insured having access to a higher % of cover)
  • Purbeck are happy to handle the renewal process with the Insureds