Every Canadian small business owner who has borrowed commercially through a bank or alternative lender is likely familiar with the personal guarantee. Before a lender releases capital to a company, it typically requires the principal - sometimes multiple principals - to sign a guarantee making them personally liable for the debt if the business cannot service it.
Until July 2026, there was no Canadian insurance product designed specifically to cover that exposure. PGI Canada launched PGicover in Vancouver on July 8, in partnership with UK-based Purbeck Insurance Services and underwritten by Markel International Insurance Company Limited's Canadian Branch, rated A (Excellent) by AM Best.
The product covers up to 80% of personal guarantee exposure under a claims-made policy, available online. Purbeck administers the policies and has operated the same model in the UK since 2017, where more than 5,000 company directors have taken out cover on guarantees totalling over £700 million.
PGI Canada's own post-launch analysis, published the week after launch, reported that hundreds of Canadian business owners had run coverage assessments within the first seven days. Three patterns emerged from that early activity that are worth noting for brokers.
First, the exposure assessment process consistently revealed that business owners underestimated how much personal liability they were actually carrying. The AI-assisted document review built into the PGicover platform is designed specifically to surface this - analysing the guarantee document and showing the applicant the full scope of their personal exposure before they decide whether to purchase cover. That applicant consistently discovered more risk than they had previously quantified is the product's own early evidence that the problem it is solving is underestimated by the market it serves.
Second, lenders encountered during the application process welcomed the existence of cover rather than objecting to it. This is relevant because a personal guarantee is a lender protection mechanism, and a product that insures the guarantor against enforcement could theoretically create lender concern about moral hazard. Early experience suggests it does not - lenders appear to treat the cover as a sign of borrower sophistication rather than a signal of increased default risk.
Third, refinancing owners bound cover fastest. Business owners who are refinancing existing debt - and who therefore already know the personal guarantee is in place and understand its implications from prior experience - moved to purchase more readily than first-time guarantors. This is a useful distribution signal for brokers: the most receptive initial audience is not necessarily the first-time business borrower, but the experienced owner who has already lived with a personal guarantee and understands what enforcement would mean.
PGicover is a claims-made policy covering up to 80% of the insured's personal guarantee exposure. It is triggered if a covered personal guarantee is enforced - meaning the lender calls the guarantee and requires the guarantor to make payment personally. Business failure alone does not trigger the policy; enforcement must occur.
The policy includes a deductible structure and coverage limits. It is distributed online through PGI Canada's platform, with Purbeck's AI-assisted document review supporting eligibility assessment and payment processing. Policies apply to commercial loan agreements in British Columbia, Alberta and Ontario in the first instance.
Craig Arnatt, founder of PGI Canada, said he was proud to bring the solution to Canadian entrepreneurs who are often required to take on significant personal financial risk to access capital.
Todd Davison, managing director of Purbeck Personal Guarantee Insurance, noted that in the UK the company had seen the impact the protection can have, citing the 5,000-plus directors and £700 million in covered guarantee exposure as evidence of what an established personal guarantee insurance market looks like.
The IB piece as originally filed presented this product as primarily a direct-to-owner proposition. The broker angle is more specific than that.
A business owner discussing commercial financing with their accountant, financial adviser or commercial insurance broker is the natural point at which this product enters the conversation. The guarantee is a standard condition of the loan; the product insures the personal exposure the guarantee creates. A broker advising a small business client on their commercial insurance program who does not raise the question of personal guarantee exposure - at a moment when the client is actively signing one - is missing a coverage conversation that sits squarely within the advisory relationship.
Whether the client ultimately purchases through PGI Canada's direct online platform or through a broker channel that PGI Canada is building out is secondary to whether the conversation happens at all. Given that the early assessment data shows business owners consistently underestimating their own exposure, the advisory value of simply raising the question and helping a client quantify what their guarantee actually means is significant even before a purchasing decision is reached.
