Personal Guarantee Insurance

Getting approved for a business loan today is no easy task and majority of lenders will ask you to sign a personal guarantee in order to be considered. There is a new insurance product out there that will insure your personal guarantee! Our office has the carrier who created the product, Burns & Wilcox, and are honored to be able to offer this to our clients. We have found it to be of significant value for our bank operation clients for they are able to close more loans and use this as a underwriting tool by offering to their clients.

If interested in learning more, please contact Jennifer Moffitt at or 810.714.5829 for more details.

Jennifer Moffitt, CIC, CWCA  

Introducing Personal Guarantee Insurance

Business Owners don’t run a business expecting it to fail. But sometimes, businesses do just that. Even those with a great idea, a strong team and a growing market can be brought down by events or market cycles out of their control.

For most small and medium-sized business owners and investors, signing a personal guarantee to secure a business loan is a fact of life. Those who sign – known as guarantors – experience the financial and emotional stress that comes with risking the loss of their house, savings and investment accounts and other personal assets should their business fail.

To give guarantors some well-earned peace of mind, Asterisk and AmTrust Financial Group created Personal Guarantee Insurance™. The insurance will cover a substantial portion of all guarantors’ net liability to a lender if the underlying business should be unable to repay its bank loan, subject to the specific terms and conditions of the policy.

Until now, business owners and other guarantors had to risk personal financial ruin. But with the introduction of Personal Guarantee Insurance™, they can preserve their assets and continue to pursue success.

How Personal Guarantee Insurance™ Works

Personal Guarantee Insurance™ protects the personal assets of small and medium-sized business owners and commercial real estate investors when they sign a personal guarantee for a commercial loan. If, after liquidating the business assets, the lender seeks personal assets to repay the balance of the loan, PGI will cover up to 70% of the insured’s net liability, subject to the coverage purchased and the terms of the policy.

By covering a substantial portion of the guarantor’s net liability, the policy provides the insured with a safety net without eliminating the motivation to overcome difficulties and restore the health of the business.

Personal Guarantee Insurance™ is an annual policy, with a premium based on the size of the loan and the risk characteristics of the underlying business. The insurance is available only after a commercial loan has been originated, renewed, or modified and only for a limited time after the loan closing.

Who Needs Personal Guarantee Insurance™

While the coverage help protect anyone with a commercial loan and a personal guarantee, Personal Guarantee Insurance™ can be quite useful for managing risk for:

  • Established business owners with a limited time to rebuild
  • Multiple partners guaranteeing a single bank loan
  • Commercial real estate investors
  • Non-owner guarantors or businesses with non-owner guarantors

For a quick demonstration of personal guarantees and how personal guarantee insurance can assist your small business clients, please view our 2 minute animated demo.

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