Is Personal Guarantee Insurance Available in the United States?
Personal Guarantee Insurance is currently available in Canada. PGI is expanding to the United States. US business owners can join the newsletter at /contact/ to be notified when coverage launches.
Personal Guarantee Insurance is not yet available in the United States. PGI is currently available in Canada and is expanding to the US market. Canadian business owners can apply today. US business owners can join the newsletter at /contact/ to be notified when coverage launches.
There is a real question behind this article: can US business owners get Personal Guarantee Insurance? The honest answer is not yet. PGI is currently available to Canadian borrowers. The US market is the next phase of expansion, and launch is planned.
This article explains what Personal Guarantee Insurance is, why US market interest is substantial, what the product looks like in Canada today, and what US business owners should do in the meantime.
What Is Personal Guarantee Insurance?
Personal Guarantee Insurance (PGI) is a specialty insurance product that protects business owners from personal financial loss arising from the enforcement of a personal guarantee given in support of a business loan or obligation.
A personal guarantee is a legally binding commitment by an individual to be personally responsible for a business debt if the business cannot repay it. When a lender enforces the guarantee, the guarantor faces personal liability. Their home equity, savings, investments, and future income can be pursued.
PGI is not:
- Loan payoff insurance
- A guarantee of business success
- A product that prevents default or business failure
- A tool that pays the lender directly
PGI is designed to cap the personal financial consequence to the guarantor if the guarantee is enforced. It is a risk transfer tool tied to a specific named personal obligation, subject to policy terms, conditions, exclusions, and limits.
Where Is PGI Currently Available?
PGI is currently available in Canada. Canadian business owners signing personal guarantees on CSBFP loans, conventional bank loans, acquisition financing, or other commercial obligations can apply today at pgicover.com.
US expansion is the next stage. The personal guarantee risk profile for US business owners is substantial. SBA 7(a) loans require unlimited, non-negotiable personal guarantees from every owner with 20% or more equity. That exposure is precisely what PGI is designed to address.
US business owners interested in coverage when it becomes available should sign up for the newsletter at /contact/.
Why US Market Interest Is High
The US small business lending market creates significant personal guarantee exposure. Several factors make PGI a natural fit once it launches in the US.
SBA 7(a) requires an unlimited unconditional personal guarantee from every owner with 20% or more equity. This is a program rule. It cannot be waived or capped by the lender. That creates substantial personal exposure for a large number of borrowers.
Entrepreneurs Through Acquisition and search fund buyers using SBA 7(a) or conventional acquisition debt carry concentrated personal guarantee exposure. Managing that exposure is a legitimate part of deal planning.
Individual buyers acquiring businesses in the $2M to $25M range routinely sign personal guarantees on senior acquisition debt. The personal financial consequence of underperformance is real and often underaddressed.
Business owners financing expansions, equipment purchases, or commercial real estate acquisitions who sign personal guarantees in connection with those obligations.
How the Product Works in Canada Today
Understanding the current Canadian product structure gives US business owners a clear picture of what to expect when US coverage launches.
PGI does not change the borrower's obligation to the lender. The personal guarantee remains exactly as signed. The lender is unaffected by whether or not the borrower carries PGI.
The policy is between the borrower and the insurer. It is not connected to the loan agreement. The lender is not a party to the insurance contract.
PGI is a claims-made policy. Coverage applies to claims made and reported during an active policy period with premiums paid in full. Timing and reporting matter. Coverage cannot be placed after a demand has already been made.
If the guarantee is enforced and the policyholder incurs a covered personal payment obligation, PGI may reimburse a covered portion of that obligation, subject to policy terms, conditions, exclusions, and limits.
Approved Product Specifications (Canadian Policies)
The following product specifications apply to current PGI Canadian policies. All figures are subject to policy terms, conditions, exclusions, and limits. Underwriting determines final pricing for each policyholder. US product terms will be confirmed at launch.
PGI: Approved Product Terms
Premium range: 2.75% to 3.25% of the coverage amount, depending on the policyholder's risk profile.
Minimum coverage limit: None.
Maximum coverage limit: $1,000,000.
Deductible: 20%.
Effective maximum indemnity: $800,000 (the $1,000,000 maximum limit after the 20% deductible).
Policy structure: Claims-made. Coverage requires an active policy with premiums paid in full and timely reporting of any claim.
These figures represent current Canadian product terms. US terms will be confirmed at launch and may differ based on regulatory requirements in the relevant state.
What PGI Does Not Do
Clarity on this point matters, because the risk of misunderstanding is real in any insurance product discussion.
PGI does not:
- Pay off the loan on behalf of the borrower
- Satisfy the lender's claim against the guarantor
- Prevent default, business failure, or insolvency
- Protect all personal assets in all scenarios
- Guarantee any business outcome
- Remove or release the personal guarantee obligation
PGI is designed to reimburse a covered portion of a covered personal payment obligation after enforcement. It is a risk transfer tool for a specific defined exposure, not a general business rescue product.
Compliance Note: US Availability
PGI is not currently licensed to sell personal guarantee insurance in the United States. This article describes the product as it operates in Canada today and discusses the planned US expansion. Nothing in this article should be read as an offer or solicitation of insurance coverage to US residents. Treatment may vary by jurisdiction. Applicable regulatory requirements in each US state will govern when and how coverage is made available.
Common Questions
Personal Guarantee Insurance is currently available in Canada. US expansion is planned. Canadian business owners can apply today. US business owners carrying personal guarantee exposure on SBA 7(a) loans, acquisition debt, or conventional commercial loans should sign up for the newsletter at /contact/ to be notified when US coverage launches.
The product is designed to address a real risk: the personal financial consequence of a business guarantee being enforced. It does not eliminate the guarantee or remove the underlying business risk. It is a defined risk transfer tool for the guarantor, subject to policy terms, conditions, exclusions, and limits.
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Sources and References
This article draws on publicly available information about Personal Guarantee Insurance as a specialty insurance product and PGI's approved product specifications.
- U.S. Small Business Administration. 7(a) loan program. https://www.sba.gov/funding-programs/loans/7a-loans
- U.S. Small Business Administration. Standard Operating Procedure 50 10. https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs
- Investopedia. Personal Guarantee: Definition and Role in Loan Requirements. https://www.investopedia.com/terms/p/personal-guarantee.asp