If your business needs financing – whether it’s to expand, acquire new assets or start a new venture – you or another director may need to provide personal surety for a business loan you take out. Providing this surety can pose a potential risk to your personal finances, and to the personal estate of that guarantor if something were to happen to them. At Cornerstone, we can help you with contingent liability cover that insures the life of the guarantor who has signed surety. In this way, you can keep your business safe and protected against sudden incidents and changes in your personal capacity.
How can contingent liability cover help protect your business?
Legal expenses:
If something happens to the guarantor of the loan, your business will get financial protection against the costs of legal defence and settlements, so it doesn’t have to dip into business profits or investments to cover them.
Business continuity:
The untimely death of a director could seriously impair a company’s credit facilities. Contingency liability cover ensures that any liability is settled in full without impacting the business’s financial position.
Covers you and your family upon death or disability:
If you as the guarantor passes away or becomes disabled, contingency liability cover ensures that you can’t be held personally liable for the business debt. This also applies if the business has a liquidity problem and cannot service or settle the debt, resulting in the personal estate of the guarantor being targeted.
Tax savings.
Proceeds from contingency liability cover are paid out tax free, as the premiums are not tax deductible.
Can your business benefit from contingency liability insurance should you need to sign surety for a business loan?
