When you’re a director taking out finance for your business, chances are the lender will ask you to sign a personal guarantee (PG). It’s the safety net for the lender but for you, it’s a risk that extends well beyond your company and into your personal life.

That’s why Personal Guarantee Insurance (PGI) exists. It’s a way of protecting directors, covering up to 80% of the liability if a PG is called in. But one of the most common questions we hear is: can PG Insurance be put through the business as an expense?

The short answer: yes, in most cases PGI can be treated as a business expense. Here’s how it works and why it matters.

Why It Makes Sense as a Business Expense

PGI directly relates to a liability created by the company’s borrowing. Although it protects the director personally, the insurance is fundamentally about supporting the business’s access to finance. Accountants and tax advisers typically view PGI premiums as an allowable business expense, much like other types of commercial insurance (e.g., professional indemnity or D&O cover).

For directors, this is important because it means:

• The company pays the premium rather than you personally.
  
  
• It improves cash flow since you’re not drawing money out to fund the policy yourself.
  
  
• It reinforces that the PG exposure is tied to the company’s financing strategy, not just your personal risk.
  
  

A Practical Example

Let’s say a construction company secures a £300,000 loan for expansion. The directors are asked to sign a personal guarantee. To protect themselves, they take out a PGI policy covering 80% of that liability.

The premium comes in at £5,000 annually. Instead of each director funding that privately, the company accounts for it as a business expense. The cost is booked against profit, just like other insurances.

The result? Directors gain peace of mind, the business secures the loan it needs, and the cost is efficiently managed within company finances.

What to Watch Out For

• Check with your accountant: While PGI is generally accepted as a business expense, it’s always worth confirming based on your company’s structure and how HMRC interprets insurance policies for your sector.
  
  
• Coverage isn’t 100%: PGI usually starts lower (60% in year one, rising to 80%) and you’ll still carry some risk personally.
  
  
• Premiums vary: Costs are linked to loan size, business risk, and the share of the guarantee being covered.
  
  

Why This Matters for Directors

Without PGI, directors often hesitate to pursue finance, fearing they’re putting their homes or savings at risk. By making PGI a business expense, the cost becomes a manageable line in the P&L rather than a personal burden.

It turns what could be a major obstacle into a strategic tool: you can access growth finance while capping personal risk, all without dipping into your own pocket.

Conclusion

Yes, you can usually put Personal Guarantee Insurance through the business as an expense. For many directors, this makes the difference between saying no to growth finance or moving forward with confidence.

If you’re considering signing a personal guarantee, PGI isn’t just peace of mind , it’s a smart way to manage both business and personal risk.

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