What Is a Certificate of Insurance in Canada?

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Article Contents
Picture of By <span>Vitalii Starov</span>
By Vitalii Starov

Updated on April 04, 2025

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Picture of By <span>Vitalii Starov</span>
By Vitalii Starov

Updated on April 04, 2025

Visit author page

5 minute read

Article Contents

Modern-day businesses require risk management strategies and due diligence to protect companies from unforeseen events. One essential tool is the Certificate of Insurance (COI), which provides proof of coverage, fosters trust, and safeguards both parties during contractual relationships.

What does a COI do for your business? Do COIs differ from province to province? When is a COI relevant to your company? Read on to learn about why these certificates are relevant to modern businesses and how you can acquire or renew your COI.

Certificate of Insurance (COI) At a Glance

  • A Certificate of Insurance (COI) is a document your insurer provides that outlines key details of a commercial insurance policy. It typically includes details such as the type of coverage, policy limits, and effective dates. 
  • The COI acts as a quick reference to prove that a business is protected, helping establish trust between parties engaged in contracts or partnerships.
  • Many contracts require a COI before any work begins, making it an essential piece of documentation for businesses engaging in partnerships or subcontracting. 

Why is a Certificate of Insurance (COI) Important for Your Business?

A COI proves that your business has the necessary insurance coverage in place should an unexpected event occur. This is important for a few reasons:

Protection From Liability

When businesses engage in activities that could lead to accidents, property damage, or other personal liabilities, having a COI confirms that there is insurance coverage to mitigate financial risks. Without proper coverage, a company may face steep legal fees, repair costs, and compensation claims that could jeopardize its financial stability.

Building Trust with Partners and Clients

In many industries, trust is built on transparency and the assurance that all parties are adequately protected. A valid COI demonstrates to partners, clients, and regulatory bodies that your business is prepared for potential risks and is compliant with legal requirements, leading to stronger professional relationships.

Maintaining Contract Compliance

Contracts often mandate that involved parties have a COI to ensure that risks are managed effectively. This requirement protects both the hiring entity and the contractor by ensuring that any claims or damages arising from an incident are covered by insurance, reducing potential legal disputes.

Why a Certificate of Insurance (COI) Matters

Types of Certificates of Insurance

These are some of the most popular types of COIs:

This certificate ensures that the project owner, project manager, and/or lender have Additional Insured status. 

An “Additional Insured” is an individual or group that is covered under the insurance policy registered in another entity’s name. A certificate holder, that is a person or entity that requests a COI, will typically ask to be named as an Additional Insured on a policyholder’s coverage plan.

This certificate must include the names and contacts of all insured parties, a description of the work involved, and a subrogation waiver.

This certificate details the kind of insurance coverage workers are entitled to in case they are injured while working on a project. This type of COI should be written in compliance with the laws of the province where the project will be completed.

A certificate of automobile insurance indicates:

  • The insured vehicles
  • The coverages purchased, along with any selected optional coverages
  • A description of how the insured was rated for the premiums
  • The coverage period

In some places, driving without an auto insurance certificate is an offence akin to driving without a license. 

Some insurance providers allow clients to obtain an electronic auto insurance certificate in Ontario. This can be saved and viewed on a mobile device.

Provincial Variations

Each province in Canada handles insurance differently from the other provinces. This means that COIs in each province can have slight variations depending on the specific provincial regulations and guidelines.

The Insurance Bureau of British Columbia (ICBC), a government-run insurer, governs many aspects of auto and business insurance. Here, COIs typically adhere to standardized coverage terms set by this authority, maintaining consistency across policyholders. Businesses in BC might notice that their COIs include details that directly reflect the mandatory requirements imposed by ICBC.

The insurance market in Ontario is predominantly private, offering a broader range of coverage options. As a result, COIs in Ontario may include customized endorsements tailored to unique business risks. These documents are influenced by the guidelines set forth by the Financial Services Regulatory Authority of Ontario (FSRA).

In Quebec, the insurance system is distinctly hybrid. The government handles auto and health insurance, while private insurers manage business and property insurance. Businesses here must be especially diligent to ensure that the COI clearly reflects both public and private coverage elements.

The competitive private insurance market in Alberta means COIs are crafted to meet stringent regulatory standards and market-driven needs. Alberta’s COIs tend to be detailed and may include additional endorsements that address emerging risks or specific industry practices.

In provinces such as Nova Scotia and New Brunswick, regulatory authorities often require higher mandatory coverage limits in response to regional risk assessments. COIs issued in these provinces reflect these standards and may include endorsements specific to regional risks.

How to Get/Renew My Certificate of Insurance

Obtaining and renewing your COI is a simple process. If you own a business, you will likely already have this document available. However, if you want to get a new or updated copy, these are the steps you’ll need to take:

  1. Review your policy details: Go through your insurance policy to ensure that it’s up to date and that all details are correct. Any discrepancies can lead to issues when a client or partner reviews your COI.
  2. Add an additional insured: If needed, name an entity as an additional insured under your policy. This provides coverage for outside parties working with you or on your property and typically only for a specified time period.
  3. Request the certificate: Once your policy details have been reviewed and any additional insured parties have been added to your policy, ask your provider to issue or renew your COI. The document will be sent directly to you or your designated business partner, meeting the requirements stipulated in your contract or agreement.

How Long Does It Take to Obtain a COI?

Obtaining a COI can take anywhere between a few days to a few weeks.

To speed up the process of obtaining a COI, make sure you have all the necessary information on hand when contacting your broker. 

How Long Is a COI Good For?

A COI is usually valid for as long as your policy is active. However, this is not always the case. Typically, a COI can last up to five years. 

Scenarios Where a COI Saves the Day

Having a Certificate of Insurance allows businesses to prove to other entities that they have adequate coverage for any liability claims that may arise. Here are a few situations where a COI can come to the rescue:

Loan application:

Many banks and financial institutions will require a valid COI before approving a business loan.

Customer request:

Some clients will want to see proof that your business has insurance before a transaction.

Business agreement:

When contracting or partnering with another business, a COI will show that you’re committed to protecting yourself and your potential business partner.

Third-party supplies or labour:

A COI is necessary whenever a third party provides goods for your products or performs tasks on your property that are beyond your direct control.

How to Verify Another Party’s COI

Verifying another party’s Certificate of Insurance is essential in establishing trust and ensuring that all contractual obligations are met. Here’s how you can confirm the validity of a COI:

  1. Review the certificate details: Carefully examine the COI for key elements such as the policy number, coverage limits, and effective dates.
  2. Contact the issuing insurance company: Reach out directly to the insurance provider listed on the COI. They can confirm whether the policy is active and meets the requirements outlined in your contract.
  3. Check for endorsements or exclusions: Ensure that the certificate does not include any endorsements or exclusions that might reduce the coverage in ways that could impact your risk management strategy.

Key Advice from MyChoice

  • Regularly review and update your insurance documentation to remain prepared if you need to present it. Keeping your COI current demonstrates to partners and clients that your business is committed to risk management.
  • Establish a systematic process for renewing your COI and verifying the certificates of potential business partners to avoid delays and disruptions in your operations.
  • Take the time to understand your insurance policy’s terms and limitations thoroughly. Knowing exactly what is covered and what isn’t allows you to address any potential gaps before they become liabilities.

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