For many SME directors, signing a personal guarantee is a necessary step to securing vital funding. Your signature can be the key to growth, but it also ties your personal assets to business risk. And as economic conditions continue to shift, that signature carries more weight than ever and protecting your personal assets is essential.
Personal guarantee insurance offers directors peace of mind, covering the financial obligations linked to a personal guarantee if a business loan goes wrong. In 2025, more directors are asking the same question: how much does personal guarantee insurance cost?
Understanding the factors that influence personal guarantee insurance pricing is crucial for responsible financial planning. While costs vary depending on your business and personal circumstances, this guide will help you make informed decisions and see the value PGI can provide.
What is personal guarantee insurance?
Personal Guarantee Insurance (PGI) is designed for business owners who have signed a personal guarantee for a company loan. A personal guarantee legally holds directors responsible for business debts if the company cannot pay.
PGI covers part or all of these liabilities, protecting directors’ personal assets such as savings, property, and investments. It’s not just insurance, it’s a safeguard that allows directors to focus on running their business with confidence, knowing that unexpected financial setbacks are managed.
Purbeck, the UK’s leading PGI provider, offers policies that are tailored to individual directors’ needs, ensuring the right level of protection for both personal and family security.
How much does PGI cost?
The cost of PGI depends on multiple factors and varies significantly from business to business. While exact premiums are calculated individually, PGI typically reflects a percentage of the guaranteed loan amount.
It’s important to remember: one-size-fits-all pricing doesn’t exist. Directors with smaller guarantees or strong company performance may pay less, while larger exposures or higher-risk situations can result in higher premiums.
Purbeck provides personalised quotes, so directors can understand precisely what coverage they need and what it will cost, rather than relying on general estimates.
Factors that influence PGI costs
Several key elements affect the price of Personal Guarantee Insurance:
- Loan Amount: Larger guarantees generally result in higher premiums.
- Company Performance: Businesses with strong financials may benefit from lower premiums.
- Type of Finance: Different types of loans: bank loans, asset finance, or invoice finance - can impact pricing.
- Level of Cover: Policies can offer full protection or partial coverage, affecting cost.
- Director’s Track Record: Experienced directors with a strong credit history may see more competitive premiums.
- Duration of Policy: Annual or multi-year policies can influence overall cost.
Understanding these factors helps directors see why PGI isn’t just an expense, it’s a strategic investment in financial security.
Is PGI worth the cost?
Consider this scenario: a director signs a personal guarantee for a £250,000 loan. If the business struggles, that liability could place personal assets at risk. A PGI policy may cover most or all of this guarantee, safeguarding the director and their family from severe financial consequences.
While the premium represents a cost, the protection PGI provides against potentially catastrophic personal loss is invaluable. In short, PGI transforms a high-risk exposure into a manageable financial plan.
How Purbeck makes PGI accessible
Purbeck is the UK’s specialist in Personal Guarantee Insurance, offering tailored solutions that reflect each director’s unique situation.
- Flexible cover options to suit business size and risk profile.
- Transparent pricing so directors understand what they pay for and why.
- Added value through Purbeck’s Business Support Service, providing advice on debt management, business recovery, and credit control to help directors navigate challenging situations.
Why choose Purbeck for PGI
At Purbeck, we’re the UK’s leading provider of Personal Guarantee Insurance, trusted by SME directors to safeguard their personal assets.
With decades of experience and policies backed by A-rated insurer Markel International, we offer the reassurance of full FCA regulation alongside practical, ongoing support. Choosing Purbeck means more than just protection against financial exposure — it’s about having expert advice, clear guidance, and peace of mind.
To find out how Purbeck can help protect your personal guarantee and support you and your business, don’t hesitate to get in touch with our expert team today.
