The Legal Purpose of the Certificate of Insurance
What is a Certificate of Insurance?
A certificate of insurance (COI) is a document that summarizes the key details of the condominium corporation’s insurance policy. It serves as proof of coverage and includes information such as:
The name of the insurer and policy number
The types of coverage included (e.g., property, liability, directors & officers)
Policy limits and deductibles
Effective and expiry dates
Condominium corporations are legally required to maintain specific insurance coverage under the Condominium Property Act (CPA) and its regulations. The COI provides unit owners, mortgage lenders, and other stakeholders with assurance that the required insurance coverage is in place.
Legal Obligation to Provide a Certificate of Insurance
The condominium corporation must issue a certificate of insurance annually and provide copies to:
All unit owners
Mortgage lenders upon request
The condominium board
Prospective buyers (often as part of an estoppel certificate request)
Per the Condominium Property Regulation, the certificate of insurance must be provided to unit owners within 30 days of policy renewal or any changes to the coverage.
Who Requires a Copy of the Certificate of Insurance?
Unit Owners and the Certificate of Insurance
Unit owners have the right to receive a copy of the COI annually and upon request. The document ensures transparency and allows owners to confirm that the condominium corporation is maintaining the legally required insurance coverage.
Mortgage Lenders and the Certificate of Insurance
Lenders require a COI to confirm that the property is adequately insured before approving or renewing mortgages for individual unit owners. If a lender requests a COI, the condominium manager or board must provide it promptly.
Prospective Buyers and Real Estate Transactions
When a unit is sold, buyers may request a COI as part of an estoppel certificate package. This ensures that the condominium corporation has active insurance coverage and is compliant with its legal obligations.
How to Verify Accuracy in the Certificate of Insurance
Common Errors in Certificates of Insurance
A COI must accurately reflect the condominium corporation’s insurance coverage. Errors can lead to financial and legal risks for the corporation and its unit owners. Common mistakes include:
Incorrect policy number or insurer name
Omitting required coverage types (e.g., property, liability, directors & officers, crime insurance)
Failure to update the document after policy changes
Missing or incorrect deductible amounts
Steps to Verify Accuracy in a Certificate of Insurance
To ensure compliance with the CPA, condominium managers should:
Review the policy details: Confirm that all mandatory insurance coverages are included.
Check the policy dates: Ensure the COI reflects the current policy term.
Verify deductible amounts: Confirm that deductibles align with the board-approved policy.
Confirm distribution: Ensure unit owners receive the COI within the required timeframe.
What to Do If Errors Are Found?
If a COI contains errors, the condominium manager must:
Contact the insurer immediately to obtain a corrected COI.
Inform the condominium board of any discrepancies.
Issue an updated COI to all relevant stakeholders.
