All‑Monies & Indemnity Clauses: Protect Your Home From Hidden Traps

All‑monies and indemnity clauses are legal terms that can quietly turn a “small” director guarantee into a promise to cover almost every dollar your business ever owes a lender or supplier. In practice, that can put your home and personal assets at risk far beyond the specific loan or trade account you thought you were signing for.

In a high‑stress environment – with mortgage stress at its highest level in 18 years according to Roy Morgan – this extra, often unseen exposure is the last thing most families need. The good news: you can usually spot, understand and limit these clauses if you know what to look for and push back early.

1. What all‑monies and indemnity clauses actually do

1.1 Plain‑English definitions

All‑monies clause
An all‑monies (or all moneys) clause says your guarantee doesn’t just cover one loan or account – it covers all amounts your business owes now or in future to that lender or supplier, of any type, until it’s properly released.

Indemnity clause
An indemnity clause is a promise to personally reimburse the creditor for any loss, cost or liability they suffer, often whether or not the main loan contract is enforceable. In many documents the indemnity sits alongside the guarantee and can actually be wider than the guarantee itself.

Together, they can mean:

1. You’re responsible for more than you think (present and future debts, costs, interest, enforcement expenses).
2. The exposure can outlive the original loan if you keep banking with the same lender.
3. Your home and investments may be on the hook even when you think a facility is “paid out”.

1.2 A simple worked example

• You sign a director guarantee on a $150,000 overdraft with Lender A.
• The guarantee has an all‑monies and indemnity clause but no dollar cap or expiry.
• Two years later, the business takes a $400,000 equipment loan and a $250,000 trade finance facility with the same lender.

If the business fails owing $600,000 across those facilities, Lender A may pursue you personally for the full $600,000 plus enforcement costs, even though you only remember signing for the overdraft.

2. The key clauses that quietly expand your liability

When we review guarantees for clients, three clusters of clauses cause most of the unexpected damage:

1. All‑monies / all‑accounts scope
2. Indemnity and reimbursement wording
3. Cross‑default and continuing security language

2.1 All‑monies wording to watch for

Look for phrases like:

• “all money which is now or at any time in the future owing”
• “any obligation, whether actual or contingent, present or future”
• “any facility, advance, accommodation or financial service”

These phrases are red flags that:

• The guarantee is not limited to one loan.
• New products (cards, overdrafts, trade finance, FX) can slide under the same guarantee automatically.
• You might remain on the hook even after refinancing one facility away.

2.2 Indemnity clauses – why they can bite harder

Indemnity clauses often say you must pay the lender for:

• Any loss arising from the loan, security or guarantee.
• Legal and enforcement costs on a full indemnity basis.
• Taxes, duties, break costs or shortfalls after a mortgagee sale.

Many also say the indemnity applies even if:

• The main loan is unenforceable for some technical reason.
• The lender has released security over the business assets.
• The company has gone into liquidation or administration.

That can make the indemnity a kind of “belt and braces” personal liability that survives problems with the rest of the documents.

2.3 Cross‑default: how one problem infects everything

A cross‑default clause says a default on one facility (missed repayment, breach of covenant, going into administration) counts as a default on all facilities with that lender.

Paired with all‑monies and indemnity clauses, this can mean:

• A missed repayment on a small equipment lease can put your home‑secured business loan in default.
• A trade account dispute with a supplier can trigger recovery across unrelated contracts you personally guaranteed.
• The lender can move early, before you’ve had time to restructure or sell assets in an orderly way.

3. How these clauses put your home and personal assets at risk

3.1 From business debt to family home – the risk chain

The risk usually unfolds like this:

1. You sign a director guarantee for a business loan, overdraft or trade account.
2. The document contains all‑monies, indemnity and cross‑default clauses.
3. The lender also takes security over your home, or later refinances business debt into your home loan.
4. The business hits a rough patch – late BAS, slowing sales, a key contract lost.
5. One facility goes into default, triggering cross‑default across the group.
6. Under the all‑monies and indemnity clauses, the lender demands you personally cover the shortfall across all facilities, and can enforce against your home.

This is why we push so hard on keeping business and home debt properly separated, as covered in detail in How To Keep Business And Home Debt Separate Without Killing Borrowing Power.

3.2 The refinancing trap: when old guarantees follow you

A common assumption is: “We refinanced that loan, so the guarantee is gone.” Not necessarily.

If the guarantee says it’s continuing until the lender releases you in writing, then:

• Payout alone is not enough.
• Rolling facilities from one product to another can actually keep the old guarantee alive.
• Opening something as simple as a corporate credit card can automatically sit under the same guarantee.

This is where a register of guarantees, linked to each property and facility, is crucial – an idea we go deeper on in The 7‑Step Checklist To Review Every Personal Guarantee Safely.

3.3 Trade accounts and leases – small documents, big exposure

The most dangerous all‑monies and indemnity clauses are often not in your main bank contracts. They’re hidden in:

• Supplier trade credit applications (building supplies, food & beverage, wholesalers).
• Equipment leases for vehicles, machinery, IT.
• Retail and commercial leases and fit‑out finance.

You think you’re signing “just the standard form” to get a $30,000 limit, and in reality you may be personally liable for all present and future debts to that supplier group, plus recovery costs. We unpack those specific risks in Personal Guarantees On Trade Credit, Leases and Fit‑Outs: What To Fix This Week.