Personal Guarantee Insurance for Canadian Business Owners

Personal Guarantee Insurance is a specialty insurance product that may reimburse a covered portion of a personal guarantee obligation when a business defaults on a loan and the lender enforces the guarantee. Coverage is subject to underwriting, jurisdiction, and policy terms, conditions, exclusions, and limits.

PGI is currently available to Canadian borrowers, including those with Canada Small Business Financing Program (CSBFP) loans, BDC financing, and commercial bank credit. If you have signed a personal guarantee to access business capital, PGI is designed to cap part of that personal exposure.

Who Needs Personal Guarantee Insurance in Canada

Most commercial lenders in Canada require personal guarantees as a condition of business credit. If you have signed a personal guarantee on a business loan, the lender holds a direct claim against your personal assets if the business cannot service the debt. PGI is designed for business owners in that position.

• CSBFP borrowers under the Canada Small Business Financing Program
• BDC borrowers and other federal or provincial program participants
• Business acquirers and ETA buyers signing personal guarantees on acquisition financing
• Owners with chartered bank commercial loans, lines of credit, or commercial mortgages

The typical PGI policyholder is a mid-career operator who has taken on commercial financing to grow, acquire, or expand a business. They understand business risk. PGI is designed to bound the personal financial consequence of that risk, not eliminate it.

How Personal Guarantee Insurance Works

PGI is a claims-made specialty insurance product. A policyholder purchases coverage when entering a business loan that requires a personal guarantee. If the business later defaults and the lender enforces the guarantee, the policy may reimburse a covered portion of the personal payment obligation that arises, subject to policy terms, conditions, exclusions, and limits.

Coverage applies only to claims made and reported during an active policy period with premiums paid in full. Timing and reporting matter. A policy that has lapsed or been cancelled will not respond to new claims.

PGI is not loan repayment insurance. It does not prevent default, prevent business failure, or guarantee that the lender will be repaid. It is a defined risk cap on personal exposure tied to a specific guarantee. For full product mechanics and eligibility, visit pgicover.com/how-it-works/.