What is PGI?
Personal Guarantee Insurance (PGI) is a specialty insurance policy for the person who signed a personal guarantee. It is claims-made and caps the personal loss if the guarantee is enforced.
What does Personal Guarantee Insurance cover?
In Canada no one else offers Personal Guarantee Insurance. PGicover offers it.
Held by the director
The policy is held by the director who signed the guarantee, called the named insured.
A separate contract
It is a contract between you and the insurer.
Your loan stays the same
It does not change your loan or your guarantee.
Why does a personal guarantee matter?
A personal guarantee is a promise, signed by you, to repay a business debt if the company cannot.
Personal Guarantee Insurance is built for this one gap.
- If the business loan is not repaid, the lender can look to you personally, not only to the company.
- Most owners sign one without asking whether any part of that exposure can be managed.
- Standard business insurance does not respond to it.
How does Personal Guarantee Insurance work?
You apply for cover against one named guarantee.
- The policy is held by the director who signed it.
- It is a claims-made policy: the claim must be made and reported during the period of insurance.
- Cover applies only while the policy is active.
What does it not do?
- It does not pay the lender.
- It does not repay the loan.
- It does not prevent default, failure or insolvency.
- It does not protect all of your assets. Your business still carries its own risk.
The policy limits the personal loss tied to one named guarantee, within the terms in the policy schedule.
Who needs Personal Guarantee Insurance?
Directors who have signed, or are about to sign, a personal guarantee on a business loan. This often includes:
- Buyers financing an acquisition
- Owners expanding a business
- Borrowers on term loans or operating lines
Cover is for a real loan, held by the director who signed.
Which loans can be covered?
Cover is written against a specific personal guarantee on a real business loan, for example:
Eligibility depends on the application and the policy terms.
- Answer questionsAbout the loan, the guarantee and the business.
- See your outcomeYou see the outcome of your application before any policy starts.
- Policy becomes activeCover begins only when the policy is active.