According to the Small Business Administration, over 50% of all small businesses fail within the first 5 years. Vendors who supply credit to these small businesses must hedge their bets by requiring that the business owner provide a personal guarantee. That is, if your business fails to meet its obligations, you would be personally held liable.
How Much Risk Are You Taking By Signing Personal Guarantees?
A recent article at Business Week highlights a very interesting and new insurance product called Personal Guarantee Insurance. It covers you personally when your personal guarantee kicks in on an obligation you entered into.
Have you had to personally guarantee anything for your business? Have you bought personal guarantee insurance? Would you consider buying personal guarantee insurance?
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