Certificate of insurance and additional insured: meeting a landlord's or client's requirements
What a certificate of insurance proves in Canada, how additional insured, waiver of subrogation, cross liability and notice of cancellation clauses work, with a lease clause worked through.
A certificate of insurance is a one- or two-page summary your broker or insurer issues to show that your policy exists, with its limits and dates. It is evidence only: it does not change your policy. If a landlord, client or municipality requires them to be an additional insured, waive subrogation, or receive notice of cancellation, the policy itself must contain those terms, usually by endorsement. Read the insurance clause in the contract, check each requirement against your policy with your broker, and only then send the certificate.
This guide is part of the business insurance quote checklist.
The common terms in an insurance clause
| Term in the contract | What it means | How it is met |
|---|---|---|
| "CGL with limits of not less than $X per occurrence" | Minimum each-occurrence limit | Your CGL limit, sometimes with an umbrella on top if the clause allows |
| "Name the Landlord as additional insured" | The other party gets the benefit of your policy for claims arising from your operations | Additional insured endorsement, either specific or blanket |
| "Waiver of subrogation" | Your insurer gives up the right to recover from the other party after paying a claim | Endorsement or policy condition |
| "Primary and non-contributory" | Your policy pays before theirs and does not seek contribution from their insurer | Endorsement wording |
| "Cross liability" or "severability of interests" | The policy treats each insured as if separately insured, so the landlord can claim against you under your policy | Common in Canadian CGL wordings; confirm it is present |
| "30 days' written notice of cancellation" | The other party is told before your cover ends | Endorsement; a certificate alone usually says the insurer will only try to give notice |
| "Tenants' legal liability for the full replacement value" | You are responsible for damage you cause to the premises | Tenants' legal liability limit high enough for that value |
| "Insurer licensed in Canada" or "rated A- or better" | Quality and licensing of the insurer | Confirm with your broker |
Specific vs blanket additional insured
A specific additional insured endorsement names one party, such as "ABC Properties Inc., as landlord of 120 Main Street". A blanket endorsement adds anyone you are required by written contract to include. Blanket wording saves time and fees if you sign many contracts, but check two things: that it requires a written contract signed before the loss, and whether it limits the additional insured's cover to liability arising from your operations, which is normal.
Worked example: a retail lease clause
An illustrative clause from a lease for a store in Halifax:
Break it down:
- Limit $5 million. If the store's CGL is $2 million, ask whether the landlord accepts $2 million CGL plus a $3 million umbrella. Illustrative cost: an umbrella of $3 million for a small store might be a few hundred dollars a year; get a quote.
- Two additional insureds. The landlord and the property manager must both be named, or covered by blanket wording.
- Cross liability. Confirm the wording includes it; most Canadian CGL forms do.
- 30 days' notice. Needs an endorsement on the policy.
- Tenants' legal liability at full replacement cost. If the premises would cost $1.2 million to rebuild and your TLL limit is $500,000, you have a $700,000 gap. Raise the limit, and note that TLL often covers only certain causes such as fire; ask about the broader "all risks" version.
- Leasehold improvements and contents. That is property insurance, not liability; include it in the same quote request.
Municipal and event permits
Municipalities across Canada often require proof of CGL for road occupancy, special events, sidewalk patios, film permits and contracts. Typical features:
- the municipality named as additional insured
- a minimum limit stated in the permit conditions
- certificates on the municipality's own form in some cases
- in Quebec, documents in French may be required
Read the permit conditions; they are binding, and the permit can be refused or revoked without the right insurance.
A process that avoids last-minute problems
- When you receive a draft lease or contract, send the insurance clause to your broker before you sign.
- Ask the broker to confirm in writing which requirements the current policy meets, and the cost of meeting the rest.
- Negotiate requirements you cannot meet at a reasonable cost; landlords and clients often accept alternatives.
- Once the policy is endorsed, ask for the certificate, and keep a list of every party holding one.
- At renewal, send updated certificates; many contracts require continuous proof.
Mistakes to avoid
- Sending a certificate that lists an additional insured when the policy has no such endorsement. If a claim arises, the policy wording governs, not the certificate.
- Agreeing to an indemnity clause much broader than your coverage. A promise to "indemnify the landlord for all claims, however caused" may include claims your policy does not cover.
- Forgetting to update the certificate after changing insurer.
- Assuming the landlord's insurance covers your contents or improvements.
- Cancelling or switching a policy mid-term without telling certificate holders; see cancelling mid-term.
Trades receive the same kind of clause from general contractors, usually with extra requirements for completed operations and workers' compensation clearances; see contractor liability quotes. To check that the quotes you are offered meet a contract before you choose, use the worked quote comparison.
Frequently asked questions
Does adding an additional insured increase my premium?
Sometimes a small amount, sometimes nothing, especially with blanket wording. It can increase claims against your policy, which is why insurers limit the cover to claims arising from your operations.
How fast can I get a certificate?
Brokers can often issue a standard certificate within a day once the policy meets the requirements. Endorsements may take longer if the insurer has to approve special wording.
Can a certificate be issued before the policy starts?
It can show a future effective date, but it should not be issued for cover that has not been bound.
My client wants their own certificate form. Is that allowed?
Some clients and public bodies require their own form. Your broker will check that the form does not promise more than the policy provides before signing it.
Sources
- Insurance Bureau of Canada — information on business liability insurance
- Insurance Brokers Association of Canada — the role of brokers in certificates and contracts
- Financial Services Regulatory Authority of Ontario — Ontario insurance conduct rules
- Autorité des marchés financiers — Quebec insurance representatives and firms
