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How to Mitigate Risk as a Business Owner During Uncertain Times

Posted by Todd Davison on Sep 20, 2023 1:00:00 PM

2023 has been a tough year for UK businesses, particularly SMEs, who have had to navigate treacherous economic waters. 


With an alarming 57% of small businesses at risk of closure, there are multiple challenges to face, including supply chain disruptions, retaining a competitive edge in a crowded market, adapting to evolving customer demands, and the burden of paying back loans. 


As a business owner, these concerns can be overwhelming, especially if a personal guarantee has been used to secure investment for your business. This places any personal assets such as savings, property, or possessions at great risk. 


In this blog, we’ll explore how to safeguard your business and assets through the use of personal guarantee insurance (PGI). 


What is a personal guarantee? 


A personal guarantee is a legal agreement that makes you personally liable for your company’s debt. This means that if your business is unable to meet its financial obligations, you are personally responsible for paying those debts. Not surprisingly, this can be a source of immense stress for any business owner, as it places your personal financial stability at risk. 


Mitigating risk with personal guarantee insurance (PGI)


Fortunately, there is a way to safeguard your personal assets if your business is unable to meet its financial commitments. 


Personal guarantee insurance (PGI) is a specialised form of insurance designed to provide a safety net for business owners who have signed personal guarantees, covering a percentage of the value of their assets. 


PGI can be tailored to each individual, with flexibility on the amount you want to insure to align with your financial situation, as well as how many directors you would like to be noted on the policy. 


What are the benefits of personal guarantee insurance?


Investing in PGI allows you to focus on what truly matters - running your business, strategizing for expansion and growth, and securing your financial peace of mind. Here are the 4 key benefits of PGI:


Safeguarding your home


With PGI, you can create a buffer between your business’s financial struggles and your personal life, protecting a space for you and your family. This means that even in a worst-case scenario, your home remains secure. 


Protecting your family 


By insuring your personal guarantee, you’re not just protecting your home but also any other personal assets you may have, ensuring that your family’s financial security remains intact, regardless of the challenges your business may face. 


Maintaining peace of mind 


Knowing that you have a safety net in place can provide great peace of mind. It allows you to make decisions for your business based on its growth potential rather than the fear of personal financial repercussions.


Enhances borrowing capacity


With PGI in place, lenders may be more inclined to extend credit to your business. This is because they have assurance that you have taken proactive measures to manage the associated risks. 


Safeguard your business and personal assets with PGI from Purbeck


At Purbeck, we understand that during uncertain economic times, being a business owner comes with a heightened level of risk. 


In 2023, taking measures to protect your personal assets is not only sensible but also essential. This vital layer of protection allows you to focus on growing your business without the constant worry of personal financial liability. 


To find out how Purbeck can help you navigate current economic challenges with confidence, get in touch with our team today. 

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