A commercial certificate of insurance (COI) provides an informational snapshot of a current business insurance policy. While a certificate of insurance provides evidence of insurance, it is not insurance coverage, and having a certificate doesn’t necessarily mean that a claim would be covered.
In reviewing reference materials, including Queen’s University’s certificate of insurance guide, a commercial certificate filed with the Canada Energy Regulator, and Insurance Bureau of Canada’s business coverage guide, we’ll help you understand how to use certificates of insurance in Canada.
What Is a Certificate of Insurance in Canada?
Other types of insurance certificates include auto liability cards required in some provinces, certificates of insurance for group benefits and creditor insurance certificates. These serve specific purposes and differ from a commercial COI.
A commercial certificate of insurance is a summary of the insurance in force as of the date the COI is issued. COIs are used in connection with commercial transactions, contracts, leases, facility rentals and projects. Typical information in a COI includes the named insured, insurer, policy numbers, policy periods, types of insurance and limits. The actual policy, including endorsements, controls coverage. A COI doesn’t modify insurance coverage, provide legal rights or assure that claims are paid for specific losses.
Why Is a Certificate of Insurance Important for Your Business?
A COI may help the parties verify compliance with insurance requirements in a contract before a vendor begins work on a project.
Reviewing a COI may prevent project delays, identify inadequate insurance limits, flag missing coverage requirements or show that insurance is issued to a different entity.
Some hiring businesses treat COI collection as a rote exercise without tailoring their review to the work being transferred to a contractor. This may leave them without necessary insurance.
Read More: Read About Insurance Gaps in Outsourced Work
Certificate Holder, Additional Insured and Loss Payee Are Different
| Role | Practical meaning | Document to request |
|---|---|---|
| Certificate holder | Receives evidence of insurance but does not become insured simply by receiving a COI | A current certificate with the holder’s exact legal name and address |
| Additional insured | May receive limited liability protection for claims connected to the named insured’s work, subject to the endorsement | The COI plus the actual additional-insured endorsement when the contract requires it |
| Loss payee | May have an interest in payment for insured property, such as financed or leased equipment | The applicable property endorsement or policy evidence, not an additional-insured label |
| Named insured | Owns the policy rights and duties identified by the contract | The declarations and policy when a full wording review is needed |
Read More: See How a Business Owner’s Policy Works
Types of Coverage a COI May Show
Proof of property coverage and a loss-payee clause may be required if the contractor leases or finances equipment.
If a contractor will operate vehicles, commercial auto or non-owned auto coverage may be required, depending on who owns and operates the vehicles.
The types of insurance required by a contract depend on the scope of services being provided. A certificate of insurance does not necessarily have to be limited to a single policy. The contract should specify the policies, limits and endorsements appropriate for the job.
For example, construction or other service work may call for commercial general liability with additional-insured coverage, depending on the nature of the work. In contrast, professional services may require errors and omissions coverage written on a claims-made basis. The retroactive date and ongoing coverage may therefore be as important as the expiration date.
How to Get or Renew Your Certificate of Insurance
- Send your broker the complete clauses from a contract, lease or permit requirement. Do not attempt to summarize the requirements from memory.
- Include all pertinent information, including the certificate holder’s correct legal name and mailing address, the policyholder’s correct legal name and mailing address, a description of the project, operation or event, its location and the relevant dates.
- Identify coverage limits, retentions, forms and endorsements, such as additional insured and waiver of subrogation, that must be shown.
- Confirm whether your current coverage meets the requirements. A broker cannot use a certificate of insurance to provide coverage that your insurer does not approve.
- When you receive the certificate and any endorsements, check the certificate holder’s name, dates and description of the operation or project before forwarding it.
A certificate is issued for the duration of the insurance policy referenced. It does not have a separate universal five-year validity period.
Read More: Explore Commercial General Liability Insurance
How to Verify Another Party’s COI
| Problem found | Why it matters | Next step |
|---|---|---|
| Wrong or shortened legal name | The insured entity may not be the contracting party. | Request a corrected COI. You can also ask the broker how the insurance identifies operating names or affiliates. |
| Expired or future-dated policy | The shown period may not cover the work date. | Require current evidence before access or work begins. |
| Limit below the contract | The vendor has not shown compliance. | Ask for revised coverage, an approved contract change or another risk decision. |
| Additional insured shown only in text | The certificate may not prove an endorsement exists. | Get the endorsement or written confirmation directly from the issuing broker or insurer. |
| Claims-made coverage without a retroactive date | Earlier work may fall outside the coverage timeline. | Confirm the retroactive date, applicable reporting rules and any required completed-work period. |
| Unclear cancellation notice | Changes may be made to the policy without the certificate holder being notified. | Ask what the policy or endorsement requires and track policy expiration dates yourself. |
If a COI seems suspicious or particularly important, verify it using independently sourced contact details for the broker or insurer.
Keep a record of the verification, including the date, who confirmed it and any exceptions.
Read More: Use the Insurance Guide for Canadian Businesses Expanding Into the U.S.