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                                                                    EXHIBIT 4(d)

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                               GUARANTEE AGREEMENT

                                 BY AND BETWEEN

                            BANCINSURANCE CORPORATION

                                       AND

                              JPMORGAN CHASE BANK,

                              AS GUARANTEE TRUSTEE

                         DATED AS OF SEPTEMBER 30, 2003

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                               GUARANTEE AGREEMENT

                  This GUARANTEE AGREEMENT (this "Guarantee"), dated as of
September 30, 2003, is executed and delivered by Bancinsurance Corporation, an
Ohio corporation (the "Guarantor"), and JPMorgan Chase Bank, a banking
corporation, organized under the laws of the State of New York, as trustee (the
"Guarantee Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Preferred Securities (as defined herein) of BIC Statutory
Trust II, a Delaware statutory trust (the "Issuer").

                  WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Trust Agreement"), dated as of the date hereof among JPMorgan Chase
Bank, not in its individual capacity but solely as Property Trustee, the
Administrators of the Issuer named therein, the Guarantor, as Sponsor, and the
Holders from time to time of undivided beneficial interests in the assets of the
Issuer, the Issuer is issuing on the date hereof those undivided beneficial
interests, having an aggregate liquidation amount of $7,000,000 (the "Preferred
Securities"); and

                  WHEREAS, as incentive for the Holders to purchase the
Preferred Securities, the Guarantor desires irrevocably and unconditionally to
agree, to the extent set forth in this Guarantee, to pay to the Holders of
Preferred Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein;

                  NOW, THEREFORE, in consideration of the purchase by each
Holder of the Preferred Securities, which purchase the Guarantor hereby agrees
shall benefit the Guarantor, the Guarantor executes and delivers this Guarantee
for the benefit of the Holders.

                                   ARTICLE I

                         DEFINITIONS AND INTERPRETATION

         SECTION 1.1 DEFINITIONS AND INTERPRETATION.

         In this Guarantee, unless the context otherwise requires:

         (a)      capitalized terms used in this Guarantee but not defined in
the preamble above have the respective meanings assigned to them in this Section
1.1;

         (b)      a term defined anywhere in this Guarantee has the same meaning
throughout;

         (c)      all references to "the Guarantee" or "this Guarantee" are to
this Guarantee as modified, supplemented or amended from time to time;

         (d)      all references in this Guarantee to "Articles" or "Sections"
are to Articles or Sections of this Guarantee, unless otherwise specified;

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         (e)      terms defined in the Trust Agreement as at the date of
execution of this Guarantee have the same meanings when used in this Guarantee,
unless otherwise defined in this Guarantee or unless the context otherwise
requires; and

         (f)      a reference to the singular includes the plural and vice
versa.

         "Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule thereunder.

         "Beneficiaries" means any Person to whom the Issuer is or hereafter
becomes indebted or liable.

         "Preferred Securities" has the meaning set forth in the recitals to
this Guarantee.

         "Common Securities" means the common securities issued by the Issuer to
the Guarantor pursuant to the Trust Agreement.

         "Corporate Trust Office" means the office of the Guarantee Trustee at
which the corporate trust business of the Guarantee Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Guarantee is located at 600 Travis, Suite 1150, Houston, Texas
77002, attention: Institutional Trust Services.

         "Covered Person" means any Holder of Preferred Securities.

         "Debentures" means the debt securities of the Guarantor designated the
Floating Rate Junior Subordinated Deferrable Interest Debentures due 2033 held
by the Property Trustee (as defined in the Trust Agreement) of the Issuer.

         "Trust Agreement Event of Default" means an "Event of Default" as
defined in the Trust Agreement.

         "Event of Default" has the meaning set forth in Section 2.4(a).

         "Fee Letter" means the fee letter, dated as of the date hereof, between
Bancinsurance Corporation and JPMorgan Chase Bank, in its capacity as trustee
under various agreements, including this Guarantee Agreement.

         "Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions (as defined
in the Trust Agreement) which are required to be paid on such Preferred
Securities to the extent the Issuer shall have funds available therefor, (ii)
the Optional Redemption Price to the extent the Issuer has funds available
therefor, with respect to any Preferred Securities called for redemption by the
Issuer, (iii) the Special Redemption Price to the extent the Issuer has funds
available therefor, with respect to Preferred Securities redeemed upon the
occurrence of a Special Event, and (iv) upon a voluntary or involuntary
liquidation, dissolution, winding-up or termination of the Issuer (other than in
connection with the

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distribution of Debentures to the Holders of the Preferred Securities in
exchange therefor as provided in the Trust Agreement), the lesser of (a) the
aggregate of the liquidation amount and all accrued and unpaid Distributions on
the Preferred Securities to the date of payment, to the extent the Issuer shall
have funds available therefor, and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the Issuer (in
either case, the "Liquidation Distribution").

         "Guarantee Trustee" means JPMorgan Chase Bank, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee and thereafter means each such Successor
Guarantee Trustee.

         "Guarantor" means Bancinsurance Corporation and each of its successors
and assigns.

         "Holder" means any holder, as registered on the books and records of
the Issuer, of any Preferred Securities; provided, however, that, in determining
whether the Holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor.

         "Indemnified Person" means the Guarantee Trustee, any Affiliate of the
Guarantee Trustee, or any officers, directors, shareholders, members, partners,
employees, representatives, nominees, custodians or agents of the Guarantee
Trustee.

         "Indenture" means the Indenture dated as of the date hereof between the
Guarantor and JPMorgan Chase Bank, not in its individual capacity but solely as
trustee, and any indenture supplemental thereto pursuant to which the Debentures
are to be issued to the institutional trustee of the Issuer.

         "Issuer" has the meaning set forth in the opening paragraph to this
Guarantee.

         "Liquidation Distribution" has the meaning set forth in the definition
of "Guarantee Payments" herein.

         "Majority in liquidation amount of the Preferred Securities" means
Holder(s) of outstanding Preferred Securities, voting together as a class, but
separately from the holders of Common Securities, of more than 50% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all Preferred
Securities then outstanding.

         "Obligations" means any costs, expenses or liabilities (but not
including liabilities related to taxes) of the Issuer other than obligations of
the Issuer to pay to holders of any Trust Securities the amounts due such
holders pursuant to the terms of the Trust Securities.

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         "Officer's Certificate" means, with respect to any Person, a
certificate signed by one authorized officer of such Person. Any Officer's
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee shall include:

         (a)      a statement that the officer signing the Officer's Certificate
has read the covenant or condition and the definitions relating thereto;

         (b)      a brief statement of the nature and scope of the examination
or investigation undertaken by the officer in rendering the Officer's
Certificate;

         (c)      a statement that the officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and

         (d)      a statement as to whether, in the opinion of the officer, such
condition or covenant has been complied with.

         "Optional Redemption Price" has the meaning set forth in the Indenture.

         "Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.

         "Purchase Agreement" means that certain Purchase Agreement dated
September 30, 2003, among the Company, the Trust, and Dekania CDO I, Ltd.,
pursuant to which Dekania CDO I, Ltd. has purchased $7,000,000 of the Preferred
Securities.

         "Responsible Officer" means, with respect to the Guarantee Trustee, the
officer in the Institutional Trust Services Department of the Guarantee Trustee
having direct responsibility for the administration of this Guarantee Agreement.

         "Special Event" has the meaning set forth in the Indenture.

         "Special Redemption Price" has the meaning set forth in the Indenture.

         "Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 3.1.

         "Trust Securities" means the Common Securities and the Preferred
Securities.

                                   ARTICLE II

                          POWERS, DUTIES AND RIGHTS OF
                                GUARANTEE TRUSTEE

         SECTION 2.1 POWERS AND DUTIES OF THE GUARANTEE TRUSTEE.

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         (a)      This Guarantee shall be held by the Guarantee Trustee for the
benefit of the Holders of the Preferred Securities, and the Guarantee Trustee
shall not transfer this Guarantee to any Person except a Holder of Preferred
Securities exercising his or her rights pursuant to Section 4.4(b) or to a
Successor Guarantee Trustee on acceptance by such Successor Guarantee Trustee of
its appointment to act as Successor Guarantee Trustee. The right, title and
interest of the Guarantee Trustee shall automatically vest in any Successor
Guarantee Trustee, and such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered pursuant
to the appointment of such Successor Guarantee Trustee.

         (b)      If an Event of Default actually known to a Responsible Officer
of the Guarantee Trustee has occurred and is continuing, the Guarantee Trustee
shall enforce this Guarantee for the benefit of the Holders of the Preferred
Securities.

         (c)      The Guarantee Trustee, before the occurrence of any Event of
Default and after curing all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Guarantee, and no implied covenants shall be read into this Guarantee against
the Guarantee Trustee. In case an Event of Default has occurred (that has not
been waived pursuant to Section 2.4) and is actually known to a Responsible
Officer of the Guarantee Trustee, the Guarantee Trustee shall exercise such of
the rights and powers vested in it by this Guarantee, and use the same degree of
care and skill in its exercise thereof, as a prudent person would exercise or
use under the circumstances in the conduct of his or her own affairs.

         (d)      No provision of this Guarantee shall be construed to relieve
the Guarantee Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:

                  (i)      prior to the occurrence of any Event of Default and
         after the curing or waiving of all such Events of Default that may have
         occurred:

                           (A)      the duties and obligations of the Guarantee
                  Trustee shall be determined solely by the express provisions
                  of this Guarantee, and the Guarantee Trustee shall not be
                  liable except for the performance of such duties and
                  obligations as are specifically set forth in this Guarantee,
                  and no implied covenants or obligations shall be read into
                  this Guarantee against the Guarantee Trustee; and

                           (B)      in the absence of bad faith on the part of
                  the Guarantee Trustee, the Guarantee Trustee may conclusively
                  rely, as to the truth of the statements and the correctness of
                  the opinions expressed therein, upon any certificates or
                  opinions furnished to the Guarantee Trustee and conforming to
                  the requirements of this Guarantee; but in the case of any
                  such certificates or opinions that by any provision hereof are
                  specifically required to be furnished to the Guarantee
                  Trustee, the Guarantee Trustee shall be under a duty to
                  examine the same to determine whether or not they conform to
                  the requirements of this Guarantee;

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                  (ii)     the Guarantee Trustee shall not be liable for any
         error of judgment made in good faith by a Responsible Officer of the
         Guarantee Trustee, unless it shall be proved that such Responsible
         Officer of the Guarantee Trustee or the Guarantee Trustee was negligent
         in ascertaining the pertinent facts upon which such judgment was made;

                  (iii)    the Guarantee Trustee shall not be liable with
         respect to any action taken or omitted to be taken by it in good faith
         in accordance with the written direction of the Holders of not less
         than a Majority in liquidation amount of the Preferred Securities
         relating to the time, method and place of conducting any proceeding for
         any remedy available to the Guarantee Trustee, or relating to the
         exercise of any trust or power conferred upon the Guarantee Trustee
         under this Guarantee; and

                  (iv)     no provision of this Guarantee shall require the
         Guarantee Trustee to expend or risk its own funds or otherwise incur
         personal financial liability in the performance of any of its duties or
         in the exercise of any of its rights or powers, if the Guarantee
         Trustee shall have reasonable grounds for believing that the repayment
         of such funds is not reasonably assured to it under the terms of this
         Guarantee or security and indemnity, reasonably satisfactory to the
         Guarantee Trustee, against such risk or liability is not reasonably
         assured to it.

         SECTION 2.2 CERTAIN RIGHTS OF GUARANTEE TRUSTEE.

         (a)      Subject to the provisions of Section 2.1:

                  (i)      The Guarantee Trustee may conclusively rely, and
         shall be fully protected in acting or refraining from acting upon, any
         resolution, certificate, statement, instrument, opinion, report,
         notice, request, direction, consent, order, bond, debenture, note,
         other evidence of indebtedness or other paper or document believed by
         it to be genuine and to have been signed, sent or presented by the
         proper party or parties.

                  (ii)     Any direction or act of the Guarantor contemplated by
         this Guarantee shall be sufficiently evidenced by an Officer's
         Certificate.

                  (iii)    Whenever, in the administration of this Guarantee,
         the Guarantee Trustee shall deem it desirable that a matter be proved
         or established before taking, suffering or omitting any action
         hereunder, the Guarantee Trustee (unless other evidence is herein
         specifically prescribed) may, in the absence of bad faith on its part,
         request and conclusively rely upon an Officer's Certificate of the
         Guarantor which, upon receipt of such request, shall be promptly
         delivered by the Guarantor.

                  (iv)     The Guarantee Trustee shall have no duty to see to
         any recording, filing or registration of any instrument (or any
         re-recording, refiling or re-registration thereof).

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                  (v)      The Guarantee Trustee may consult with counsel of its
         selection, and the advice or opinion of such counsel with respect to
         legal matters shall be full and complete authorization and protection
         in respect of any action taken, suffered or omitted by it hereunder in
         good faith and in accordance with such advice or opinion. Such counsel
         may be counsel to the Guarantor or any of its Affiliates and may
         include any of its employees. The Guarantee Trustee shall have the
         right at any time to seek instructions concerning the administration of
         this Guarantee from any court of competent jurisdiction.

                  (vi)     The Guarantee Trustee shall be under no obligation to
         exercise any of the rights or powers vested in it by this Guarantee at
         the request or direction of any Holder, unless such Holder shall have
         provided to the Guarantee Trustee such security and indemnity,
         reasonably satisfactory to the Guarantee Trustee, against the costs,
         expenses (including attorneys' fees and expenses and the expenses of
         the Guarantee Trustee's agents, nominees or custodians) and liabilities
         that might be incurred by it in complying with such request or
         direction, including such reasonable advances as may be requested by
         the Guarantee Trustee; provided, however, that nothing contained in
         this Section 2.2(a)(vi) shall relieve the Guarantee Trustee, upon the
         occurrence of an Event of Default, of its obligation to exercise the
         rights and powers vested in it by this Guarantee; provided, further,
         that nothing contained in this Section 2.2(a)(vi) shall prevent the
         Guarantee Trustee from exercising its rights under Section 3.2.

                  (vii)    The Guarantee Trustee shall not be bound to make any
         investigation into the facts or matters stated in any resolution,
         certificate, statement, instrument, opinion, report, notice, request,
         direction, consent, order, bond, debenture, note, other evidence of
         indebtedness or other paper or document, but the Guarantee Trustee, in
         its discretion, may make such further inquiry or investigation into
         such facts or matters as it may see fit.

                  (viii)   The Guarantee Trustee may execute any of the trusts
         or powers hereunder or perform any duties hereunder either directly or
         by or through agents, nominees, custodians or attorneys, and the
         Guarantee Trustee shall not be responsible for any misconduct or
         negligence on the part of any agent or attorney appointed with due care
         by it hereunder.

                  (ix)     Any action taken by the Guarantee Trustee or its
         agents hereunder shall bind the Holders of the Preferred Securities,
         and the signature of the Guarantee Trustee or its agents alone shall be
         sufficient and effective to perform any such action. No third party
         shall be required to inquire as to the authority of the Guarantee
         Trustee to so act or as to its compliance with any of the terms and
         provisions of this Guarantee, both of which shall be conclusively
         evidenced by the Guarantee Trustee's or its agent's taking such action.

                  (x)      Whenever in the administration of this Guarantee the
         Guarantee Trustee shall deem it desirable to receive instructions with
         respect to enforcing any remedy or right or taking any other action
         hereunder, the Guarantee Trustee

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         (i) may request instructions from the Holders of a Majority in
         liquidation amount of the Preferred Securities, (ii) may refrain from
         enforcing such remedy or right or taking such other action until such
         instructions are received, and (iii) shall be protected in conclusively
         relying on or acting in accordance with such instructions.

                  (xi)     The Guarantee Trustee shall not be liable for any
         action taken, suffered, or omitted to be taken by it in good faith,
         without negligence, and reasonably believed by it to be authorized or
         within the discretion or rights or powers conferred upon it by this
         Guarantee.

         (b)      No provision of this Guarantee shall be deemed to impose any
duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law to perform
any such act or acts or to exercise any such right, power, duty or obligation.
No permissive power or authority available to the Guarantee Trustee shall be
construed to be a duty.

         SECTION 2.3 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE.

         The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Guarantee Trustee does not assume any
responsibility for their correctness. The Guarantee Trustee makes no
representation as to the validity or sufficiency of this Guarantee.

         SECTION 2.4 EVENTS OF DEFAULT; WAIVER.

         (a)      An Event of Default under this Guarantee will occur upon the
failure of the Guarantor to perform any of its payment or other obligations
hereunder.

         (b)      The Holders of a Majority in liquidation amount of the
Preferred Securities may, voting or consenting as a class, on behalf of the
Holders of all of the Preferred Securities, waive any past Event of Default and
its consequences. Upon such waiver, any such Event of Default shall cease to
exist, and shall be deemed to have been cured, for every purpose of this
Guarantee, but no such waiver shall extend to any subsequent or other default or
Event of Default or impair any right consequent thereon.

         SECTION 2.5 EVENTS OF DEFAULT; NOTICE.

         (a)      The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Preferred Securities and the Guarantor, notices
of all Events of Default actually known to a Responsible Officer of the
Guarantee Trustee, unless such defaults have been cured before the giving of
such notice, provided, however, that the Guarantee Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the Guarantee
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders of the Preferred Securities.

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         (b)      The Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless the Guarantee Trustee shall have received written
notice from the Guarantor or a Holder of the Preferred Securities (except in the
case of a payment default), or a Responsible Officer of the Guarantee Trustee
charged with the administration of this Guarantee shall have obtained actual
knowledge thereof.

                                   ARTICLE III

                                GUARANTEE TRUSTEE

         SECTION 3.1 GUARANTEE TRUSTEE; ELIGIBILITY.

         (a)      There shall at all times be a Guarantee Trustee which shall:

                  (i)      not be an Affiliate of the Guarantor, and

                  (ii)     be a corporation organized and doing business under
         the laws of the United States of America or any State or Territory
         thereof or of the District of Columbia, or Person authorized under such
         laws to exercise corporate trust powers, having a combined capital and
         surplus of at least U.S. $50 million ($50,000,000), and subject to
         supervision or examination by Federal, State, Territorial or District
         of Columbia authority. If such corporation publishes reports of
         condition at least annually, pursuant to law or to the requirements of
         the supervising or examining authority referred to above, then, for the
         purposes of this Section 3.1(a)(ii), the combined capital and surplus
         of such corporation shall be deemed to be its combined capital and
         surplus as set forth in its most recent report of condition so
         published.

         (b)      If at any time the Guarantee Trustee shall cease to be
eligible to so act under Section 3.1(a), the Guarantee Trustee shall immediately
resign in the manner and with the effect set out in Section 3.2(c).

         (c)      If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee shall either eliminate such interest or resign to the extent
and in the manner provided by, and subject to this Guarantee.

         SECTION 3.2 APPOINTMENT, REMOVAL AND RESIGNATION OF GUARANTEE TRUSTEE.

         (a)      Subject to Section 3.2(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor except during an
Event of Default.

         (b)      The Guarantee Trustee shall not be removed in accordance with
Section 3.2(a) until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by written instrument executed by such Successor
Guarantee Trustee and delivered to the Guarantor.

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         (c)      The Guarantee Trustee appointed to office shall hold office
until a Successor Guarantee Trustee shall have been appointed or until its
removal or resignation. The Guarantee Trustee may resign from office (without
need for prior or subsequent accounting) by an instrument in writing executed by
the Guarantee Trustee and delivered to the Guarantor, which resignation shall
not take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by an instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.

         (d)      If no Successor Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 3.2 within 30 days after
delivery of an instrument of removal or resignation, the Guarantee Trustee
resigning or being removed may petition any court of competent jurisdiction for
appointment of a Successor Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a Successor
Guarantee Trustee.

         (e)      No Guarantee Trustee shall be liable for the acts or omissions
to act of any Successor Guarantee Trustee.

         (f)      Upon termination of this Guarantee or removal or resignation
of the Guarantee Trustee pursuant to this Section 3.2, the Guarantor shall pay
to the Guarantee Trustee all amounts owing to the Guarantee Trustee under
Sections 7.2 and 7.3 accrued to the date of such termination, removal or
resignation.

                                   ARTICLE IV

                                   GUARANTEE

         SECTION 4.1 GUARANTEE.

         (a)      The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense
(except the defense of payment by the Issuer), right of set-off or counterclaim
that the Issuer may have or assert. The Guarantor's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts by
the Guarantor to the Holders or by causing the Issuer to pay such amounts to the
Holders.

         (b)      The Guarantor hereby also agrees to assume any and all
Obligations of the Issuer and in the event any such Obligation is not so
assumed, subject to the terms and conditions hereof, the Guarantor hereby
irrevocably and unconditionally guarantees to each Beneficiary the full payment,
when and as due, of any and all Obligations to such Beneficiaries. This
Guarantee is intended to be for the benefit of, and to be enforceable by, all
such Beneficiaries, whether or not such Beneficiaries have received notice
hereof.

         SECTION 4.2 WAIVER OF NOTICE AND DEMAND.

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         The Guarantor hereby waives notice of acceptance of this Guarantee and
of any liability to which it applies or may apply, presentment, demand for
payment, any right to require a proceeding first against the Issuer or any other
Person before proceeding against the Guarantor, protest, notice of nonpayment,
notice of dishonor, notice of redemption and all other notices and demands.

         SECTION 4.3 OBLIGATIONS NOT AFFECTED.

         The obligations, covenants, agreements and duties of the Guarantor
under this Guarantee shall in no way be affected or impaired by reason of the
happening from time to time of any of the following:

         (a)      the release or waiver, by operation of law or otherwise, of
the performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;

         (b)      the extension of time for the payment by the Issuer of all or
any portion of the Distributions, Optional Redemption Price, Special Redemption
Price, Liquidation Distribution or any other sums payable under the terms of the
Preferred Securities or the extension of time for the performance of any other
obligation under, arising out of or in connection with, the Preferred Securities
(other than an extension of time for payment of Distributions, Optional
Redemption Price, Special Redemption Price, Liquidation Distribution or other
sum payable that results from the extension of any interest payment period on
the Debentures or any extension of the maturity date of the Debentures permitted
by the Indenture);

         (c)      any failure, omission, delay or lack of diligence on the part
of the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;

         (d)      the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Issuer or any of the assets of
the Issuer;

         (e)      any invalidity of, or defect or deficiency in, the Preferred
Securities;

         (f)      the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or

         (g)      any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 4.3 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.

         There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.

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         SECTION 4.4 RIGHTS OF HOLDERS.

         (a)      The Holders of a Majority in liquidation amount of the
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of this Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under this Guarantee; provided, however,
that (subject to Section 2.1) the Guarantee Trustee shall have the right to
decline to follow any such direction if the Guarantee Trustee being advised by
counsel determines that the action or proceeding so directed may not lawfully be
taken or if the Guarantee Trustee in good faith by its board of directors or
trustees, executive committees or a trust committee of directors or trustees
and/or Responsible Officers shall determine that the action or proceedings so
directed would involve the Guarantee Trustee in personal liability.

         (b)      Any Holder of Preferred Securities may institute a legal
proceeding directly against the Guarantor to enforce the Guarantee Trustee's
rights under this Guarantee, without first instituting a legal proceeding
against the Issuer, the Guarantee Trustee or any other Person. The Guarantor
waives any right or remedy to require that any such action be brought first
against the Issuer, the Guarantee Trustee or any other Person before so
proceeding directly against the Guarantor.

         SECTION 4.5 GUARANTEE OF PAYMENT.

         This Guarantee creates a guarantee of payment and not of collection.

         SECTION 4.6 SUBROGATION.

         The Guarantor shall be subrogated to all (if any) rights of the Holders
of Preferred Securities against the Issuer in respect of any amounts paid to
such Holders by the Guarantor under this Guarantee; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any right that it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Guarantee, if, after giving effect to any such
payment, any amounts are due and unpaid under this Guarantee. If any amount
shall be paid to the Guarantor in violation of the preceding sentence, the
Guarantor agrees to hold such amount in trust for the Holders and to pay over
such amount to the Holders.

         SECTION 4.7 INDEPENDENT OBLIGATIONS.

         The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 4.3 hereof.

         SECTION 4.8 ENFORCEMENT BY A BENEFICIARY.

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<PAGE>

         A Beneficiary may enforce the obligations of the Guarantor contained in
Section 4.1(b) directly against the Guarantor, and the Guarantor waives any
right or remedy to require that any action be brought against the Issuer or any
other person or entity before proceeding against the Guarantor. The Guarantor
shall be subrogated to all rights (if any) of any Beneficiary against the Issuer
in respect of any amounts paid to the Beneficiaries by the Guarantor under this
Guarantee; provided, however, that the Guarantor shall not (except to the extent
required by mandatory provisions of law) be entitled to enforce or exercise any
rights that it may acquire by way of subrogation or any indemnity, reimbursement
or other agreement, in all cases as a result of payment under this Guarantee, if
at the time of any such payment, and after giving effect to such payment, any
amounts are due and unpaid under this Guarantee.

                                   ARTICLE V

                    LIMITATION OF TRANSACTIONS; SUBORDINATION

         SECTION 5.1 LIMITATION OF TRANSACTIONS.

         So long as any Preferred Securities remain outstanding, if (a) there
shall have occurred and be continuing an Event of Default or a Trust Agreement
Event of Default or (b) the Guarantor shall have selected an Extension Period as
provided in the Trust Agreement and such period, or any extension thereof, shall
have commenced and be continuing, then the Guarantor shall not and shall not
permit any Affiliate to (x) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the Guarantor's or such Affiliate's capital stock (other than payments of
dividends or distributions to the Guarantor) or make any guarantee payments with
respect to the foregoing or (y) make any payment of principal of or interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the
Guarantor or any Affiliate that rank pari passu in all respects with or junior
in interest to the Debentures (other than, with respect to clauses (x) and (y)
above, (i) repurchases, redemptions or other acquisitions of shares of capital
stock of the Guarantor in connection with any employment contract, benefit plan
or other similar arrangement with or for the benefit of one or more employees,
officers, directors or consultants, in connection with a dividend reinvestment
or stockholder stock purchase plan or in connection with the issuance of capital
stock of the Guarantor (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into prior
to the occurrence of the Event of Default, Trust Agreement Event of Default or
Extension Period, as applicable, (ii) as a result of any reclassification,
exchange or conversion of any class or series of the Guarantor's capital stock
(or any capital stock of a subsidiary of the Guarantor) for any class or series
of the Guarantor's capital stock or of any class or series of the Guarantor's
indebtedness for any class or series of the Guarantor's capital stock, (iii) the
purchase of fractional interests in shares of the Guarantor's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, or pursuant to a merger, consolidation or
other business combination, (iv) any declaration of a dividend in connection
with any stockholders' rights plan, or the issuance of rights, stock or other
property under any stockholders' rights plan, or the redemption or repurchase of
rights

                                       14
<PAGE>

pursuant thereto, (v) any dividend in the form of stock, warrants, options or
other rights where the dividend stock or the stock issuable upon exercise of
such warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks pari passu with or junior to such stock and any
cash payments in lieu of fractional shares issued in connection therewith, or
(vi) payments under this Guarantee).

         SECTION 5.2 RANKING.

         This Guarantee will constitute an unsecured obligation of the Guarantor
and will rank subordinate and junior in right of payment to all present and
future Senior Indebtedness (as defined in the Indenture) of the Guarantor. By
their acceptance thereof, each Holder of Preferred Securities agrees to the
foregoing provisions of this Guarantee and the other terms set forth herein.

         The right of the Guarantor to participate in any distribution of assets
of any of its subsidiaries upon any such subsidiary's liquidation or
reorganization or otherwise is subject to the prior claims of creditors of that
subsidiary, except to the extent the Guarantor may itself be recognized as a
creditor of that subsidiary. Accordingly, the Guarantor's obligations under this
Guarantee will be effectively subordinated to all existing and future
liabilities of the Guarantor's subsidiaries, and claimants should look only to
the assets of the Guarantor for payments hereunder. This Guarantee does not
limit the incurrence or issuance of other secured or unsecured debt of the
Guarantor, including Senior Indebtedness of the Guarantor, under any indenture
that the Guarantor may enter into in the future or otherwise.

                                   ARTICLE VI

                                   TERMINATION

         SECTION 6.1 TERMINATION.

         This Guarantee shall terminate as to the Preferred Securities upon the
earliest to occur of (i) full payment of the Optional Redemption Price or
Special Redemption Price of all Preferred Securities then outstanding, (ii) the
distribution of all of the Debentures to the Holders of all of the Preferred
Securities or (iii) full payment of the amounts payable in accordance with the
Trust Agreement upon dissolution of the Issuer. This Guarantee will continue to
be effective or will be reinstated, as the case may be, if at any time any
Holder of Preferred Securities must restore payment of any sums paid under the
Preferred Securities or under this Guarantee.

                                   ARTICLE VII

                                 INDEMNIFICATION

         SECTION 7.1 EXCULPATION.

         (a)      No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage or

                                       15
<PAGE>

claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith in accordance with this Guarantee and in a
manner that such Indemnified Person reasonably believed to be within the scope
of the authority conferred on such Indemnified Person by this Guarantee or by
law, except that an Indemnified Person shall be liable for any such loss, damage
or claim incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.

         (b)      An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Issuer or the Guarantor and upon such
information, opinions, reports or statements presented to the Issuer or the
Guarantor by any Person as to matters the Indemnified Person reasonably believes
are within such other Person's professional or expert competence and who, if
selected by such Indemnified Person, has been selected with reasonable care by
such Indemnified Person, including information, opinions, reports or statements
as to the value and amount of the assets, liabilities, profits, losses, or any
other facts pertinent to the existence and amount of assets from which
Distributions to Holders of Preferred Securities might properly be paid.

         SECTION 7.2 INDEMNIFICATION.

         (a)      The Guarantor agrees to indemnify and hold harmless each
Indemnified Person from and against any loss, damage, liability, tax (other than
income, franchise or other taxes imposed on amounts paid pursuant to Section
7.3), penalty, expense or claim of any kind or nature whatsoever incurred
without negligence, bad faith or willful misconduct on its part, arising out of
or in connection with the acceptance or administration of this Guarantee,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder. The Guarantee Trustee will not claim or exact any lien or
charge on any Guarantee Payments as a result of any amount due to it under this
Guarantee. This indemnity shall survive the termination of this Guarantee or the
resignation or removal of the Guarantee Trustee.

         (b)      Promptly after receipt by an Indemnified Person under this
Section 7.2 of notice of the commencement of any action, such Indemnified Person
will, if a claim in respect thereof is to be made against the Guarantor under
this Section 7.2, notify the Guarantor in writing of the commencement thereof;
but the failure so to notify the Guarantor (i) will not relieve the Guarantor
from liability under paragraph (a) above unless and to the extent that the
Guarantor did not otherwise learn of such action and such failure results in the
forfeiture by the Guarantor of substantial rights and defenses and (ii) will
not, in any event, relieve the Guarantor from any obligations to any Indemnified
Person other than the indemnification obligation provided in paragraph (a)
above. The Guarantor shall be entitled to appoint counsel of the Guarantor's
choice at the Guarantor's expense to represent the Indemnified Person in any
action for which indemnification is sought (in which case the Guarantor shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the Indemnified Person or Persons except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to the
Indemnified Person. Notwithstanding the Guarantor's

                                       16
<PAGE>

election to appoint counsel to represent the Guarantor in an action, the
Indemnified Person shall have the right to employ separate counsel (including
local counsel), and the Guarantor shall bear the reasonable fees, costs and
expenses of such separate counsel if (i) the use of counsel chosen by the
Guarantor to represent the Indemnified Person would present such counsel with a
conflict of interest, (ii) the actual or potential defendants in, or targets of,
any such action include both the Indemnified Person and the Guarantor and the
Indemnified Person shall have reasonably concluded that there may be legal
defenses available to it and/or other Indemnified Person(s) which are different
from or additional to those available to the Guarantor, (iii) the Guarantor
shall not have employed counsel satisfactory to the Indemnified Person to
represent the Indemnified Person within a reasonable time after notice of the
institution of such action or (iv) the Guarantor shall authorize the Indemnified
Person to employ separate counsel at the expense of the Guarantor. The Guarantor
will not, without the prior written consent of the Indemnified Persons, settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
Indemnified Persons are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each Indemnified Person from all liability arising out of such claim, action,
suit or proceeding.

         (c)      In no event shall the Guarantee Trustee be liable for any
failure or delay in the performance of its obligations hereunder because of
circumstances beyond its reasonable control, including, but not limited to, acts
of God, flood, war (declared or undeclared), terrorism, fire, riot, embargo,
government action, including any laws, ordinances, regulations, governmental
action or the like which delay, restrict or prohibit the providing of the
services contemplated by this Guarantee.

         SECTION 7.3 COMPENSATION; REIMBURSEMENT OF EXPENSES.

         The Guarantor agrees:

         (a)      subject to the Fee Letter, to pay to the Guarantee Trustee
from time to time such compensation for all services rendered by it hereunder as
the parties shall agree to from time to time (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust); and

         (b)      except as otherwise expressly provided herein and subject to
the Fee Agreement, to reimburse the Guarantee Trustee upon request for all
reasonable expenses, disbursements and advances incurred or made by it in
accordance with any provision of this Guarantee (including the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to its
negligence or willful misconduct.

         The provisions of this Section 7.3 shall survive the resignation or
removal of the Guarantee Trustee and the termination of this Guarantee.

                                       17
<PAGE>

                                  ARTICLE VIII

                                  MISCELLANEOUS

         SECTION 8.1 SUCCESSORS AND ASSIGNS.

         All guarantees and agreements contained in this Guarantee shall bind
the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the Preferred
Securities then outstanding. Except in connection with any merger or
consolidation of the Guarantor with or into another entity or any sale, transfer
or lease of the Guarantor's assets to another entity, in each case, to the
extent permitted under the Indenture, the Guarantor may not assign its rights or
delegate its obligations under this Guarantee without the prior approval of the
Holders of at least a Majority in liquidation amount of the Preferred
Securities.

         SECTION 8.2 AMENDMENTS.

         Except with respect to any changes that do not adversely affect the
rights of Holders of the Preferred Securities in any material respect (in which
case no consent of Holders will be required), this Guarantee may be amended only
with the prior approval of the Holders of not less than a Majority in
liquidation amount of the Preferred Securities and the Guarantor. The provisions
of the Trust Agreement with respect to amendments thereof apply to the giving of
such approval.

         SECTION 8.3 NOTICES.

         All notices provided for in this Guarantee shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, as follows:

         (a)      If given to the Guarantee Trustee, at the Guarantee Trustee's
mailing address set forth below (or such other address as the Guarantee Trustee
may give notice of to the Holders of the Preferred Securities and the
Guarantor):

                  JPMorgan Chase Bank
                  600 Travis, Suite 1150
                  Houston, Texas 77002
                  Attention:  Institutional Trust Services
                  Facsimile: 713-577-5200

         (b)      If given to the Guarantor, at the Guarantor's mailing address
set forth below (or such other address as the Guarantor may give notice of to
the Holders of the Preferred Securities and to the Guarantee Trustee):

                  Bancinsurance Corporation
                  250 East Broad Street, 10th Floor
                  Columbus, Ohio 43215

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<PAGE>

                  Attention:  John S. Sokol
                  Telecopy: 614-228-5552

         (c)      If given to any Holder of the Preferred Securities, at the
address set forth on the books and records of the Issuer.

         All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.

         SECTION 8.4 BENEFIT.

         This Guarantee is solely for the benefit of the Beneficiaries and,
subject to Section 2.1(a), is not separately transferable from the Preferred
Securities.

         SECTION 8.5 GOVERNING LAW.

         THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW).

         SECTION 8.6 COUNTERPARTS.

         This Guarantee may be executed in one or more counterparts, each of
which shall be an original, but all of which taken together shall constitute one
and the same instrument.

         SECTION 8.7 SEPARABILITY.

         In case one or more of the provisions contained in this Guarantee shall
for any reason be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provisions of this Guarantee, but this Guarantee shall be construed as if such
invalid or illegal or unenforceable provision had never been contained herein.

                     Signatures appear on the following page

                                       19
<PAGE>

         THIS GUARANTEE is executed as of the day and year first above written.

                                         BANCINSURANCE CORPORATION,

                                         AS GUARANTOR

                                         By: /s/John Sokol
                                             -----------------------------------
                                             Name: John Sokol
                                             Title: President

                                         JPMORGAN CHASE BANK,
                                         AS GUARANTEE TRUSTEE

                                         By: /s/Rebecca A. Newman
                                             ----------------------------------
                                             Name: Rebecca A. Newman
                                             Title: Vice President