What a Certificate of Currency does — and does not — confirm

A Certificate of Currency is commonly requested

Businesses are often asked to provide a Certificate of Currency, or COC, when dealing with landlords, shopping centres, principals, builders and contractors, lenders, clients and other commercial counterparties.

A COC is a useful document, but its purpose is limited.

It should not be treated as a substitute for the policy itself.

What a Certificate of Currency usually shows

Formats differ between insurers, but a COC commonly includes:

• the insured name;
• policy number;
• policy period;
• type of insurance;
• certain sums insured or limits of liability;
• insurer details; and
• sometimes an interested party or other notation.

Its main purpose is to provide evidence that the stated insurance is current at the time the certificate is issued and to summarise some of the key policy details.

What a COC does not usually show

A Certificate of Currency does not normally reproduce the full policy.

It may not show:

• all insuring clauses;
• all exclusions;
• endorsements;
• excesses;
• sub-limits;
• definitions;
• conditions;
• territorial limits;
• notification requirements; or
• claims procedures.

So the existence of a COC does not prove that every exposure or contractual requirement is covered.

A $20 million Public Liability certificate may not be enough

Suppose a contract requires Public Liability insurance of at least $20 million.

A COC showing a $20 million limit confirms one important point, but it may not confirm all of the contract’s insurance requirements.

The contract may also require:

• particular activities to be insured;
• a principal to be noted;
• cross liability;
• waiver of subrogation;
• a specific territorial scope;
• particular exclusions not to apply; or
• cover to remain in force for the duration of the contract.

A COC alone cannot establish that every one of those requirements has been met.

A COC does not guarantee future cover

A Certificate of Currency generally reflects the policy status when the certificate is issued.

After that, circumstances may change. For example:

• a policy may expire;
• a policy may be cancelled;
• premium may remain unpaid;
• business activities may change; or
• policy terms may be varied.

For this reason, long-term projects and contracts sometimes require an updated COC each year.

A COC does not guarantee a claim will be paid

A Certificate of Currency is not a claims decision.

Whether a particular loss is covered depends on matters such as:

• the facts of the event;
• the policy schedule;
• the policy wording;
• endorsements;
• exclusions;
• excesses;
• information disclosed to the insurer; and
• the insurer’s assessment of the claim.

The certificate does not override the policy terms.

Why the full insurance clause matters

Clients sometimes send a broker a single sentence from a contract:

“Please provide a Certificate of Currency.”

The more important information may be in the full insurance clause around it.

For example, the contract may also require:

• Public Liability;
• Professional Indemnity;
• Cyber Insurance;
• Contract Works;
• Workers Compensation;
• a particular limit;
• a run-off period; or
• specific wording relating to the principal.

Reviewing only the request for a COC can miss the actual insurance requirements.

How Wesure can assist

We can assist clients to:

• obtain a Certificate of Currency for policies we arrange;
• check the basic insurance information shown on the certificate;
• identify insurance requirements contained in a contract;
• contact the insurer where an interested party or other notation is requested; and
• explain what the COC does and does not confirm.

Insurance brokers do not provide legal advice on contractual liabilities.

Where the issue involves indemnity clauses, contractual liability or legal interpretation, the contract should be reviewed by an appropriately qualified legal adviser.

Key point

A Certificate of Currency is best understood as:

evidence that certain insurance is current and a summary of some policy details.

It is not:

proof that every contractual exposure is fully insured.

General information only: This article provides general information only. The effect and content of a Certificate of Currency depend on the relevant policy and insurer. Contractual and legal requirements should be reviewed together with the full contract and policy documents.