How Insurers Use Private Investigators in Ontario

Insurance investigation in Ontario refers to the engagement of a licensed private investigator by a property-and-casualty insurer — or its legal counsel — to gather evidence bearing on the validity or extent of an insurance claim. Under Ontario’s Private Security and Investigative Services Act, 2005, only licensed investigators may lawfully conduct these inquiries for remuneration.

As of March 2025, Ontario had 2,286 licensed private investigators and 252 licensed PI agencies regulated under the PSISA, with 435 new PI licences issued in 2024–25 — a 31% year-over-year increase reflecting growing demand from insurers, legal counsel, and corporate clients. This guide explains what triggers an insurer’s PI engagement, what investigators can lawfully do, how evidence is assembled, and how Ontario courts evaluate surveillance at trial.

What insurance companies use private investigators for

Insurance companies retain licensed private investigators primarily to document whether a claimant’s physical capabilities are consistent with their reported limitations. Investigations are commissioned across four main claim types: accident benefits under the Statutory Accident Benefits Schedule, tort personal injury, long-term disability, and property claims where fraud or arson is suspected.

The PI’s role is evidentiary, not decisional. The investigator’s job is to produce admissible, court-ready evidence the insurer and its counsel can rely on. The coverage decision itself remains with the insurer.

The Office of the Privacy Commissioner of Canada confirmed this framework in its 2008 findings: insurance investigations are a legitimate purpose under PIPEDA when properly scoped, but the purpose is gathering objective evidence — not making the coverage call.

Équité Association — Canada’s national insurance-crime intelligence body — identifies accident benefits fraud as the “gateway fraud” that serves as the entry point for organized fraud networks. In 2023, Équité launched its ÉQ Insights predictive-analytics platform. Member insurers use ÉQ Insights to flag suspicious accident-benefits claims for referral to investigation before PI deployment.

The legal framework governing PI engagement by insurers in Canada

Every private investigator who conducts insurance-related surveillance in Ontario must hold a licence under the Private Security and Investigative Services Act, 2005 (S.O. 2005, c. 34). Section 6 of the Act prohibits unlicensed investigative work. Section 45(1) sets penalties of up to $25,000 and one year’s imprisonment for an individual, and up to $250,000 for a corporation.

Ontario’s Insurance Act, R.S.O. 1990, c. I.8, s. 233 provides that a claim is invalid and the insured forfeits the right to indemnity where the insured wilfully makes a false statement in respect of a claim. This statutory trigger makes PI-gathered surveillance evidence particularly significant in fraud-related defence.

Under Ontario’s Statutory Accident Benefits Schedule, O. Reg. 34/10, s. 33, an accident-benefits claimant must submit to an examination under oath when requested by the insurer. The insurer must provide written reasons for the request. Failure to attend can result in benefits being suspended pending compliance.

Privacy law adds an additional layer. Under PIPEDA Principle 4.4, insurers and their PI contractors may conduct covert surveillance only when four conditions are met. First, they must hold substantial grounds to suspect a breach of trust or law — a contested claim alone is not enough. Second, less privacy-invasive alternatives must have been considered and exhausted. Third, collection must be limited to the stated investigation purpose. Fourth, the privacy loss must be proportional to the benefit gained. The OPC confirmed this four-condition framework applies to insurance investigations in its 2008 findings.

What triggers an insurer to retain a private investigator

Ontario insurers commonly retain a PI when one or more of the following flags arise:

• The insurer receives credible information that a claimant is more physically active than reported
• Social media activity contradicts claimed functional limitations
• Medical evidence is internally inconsistent or fails to track the claimed disability progression
• The claim approaches the 24-month definition-of-disability change in a long-term disability policy
• Predictive analytics identify billing patterns consistent with organized fraud networks

The Financial Services Regulatory Authority of Ontario (FSRA) provides guidance on auto insurance fraud indicators that inform insurer triage decisions before PI referral. The PIPEDA substantial-grounds requirement means these triggers must be weighed against the proportionality standard — not every flagged file proceeds to field surveillance.

Types of insurance claims most commonly investigated

Insurance crime costs Canada an estimated $3–5 billion annually — for the full breakdown of IBC and Équité data on fraud costs, staged collisions, and FSRA enforcement, see our compilation of insurance fraud statistics in Canada.

Équité Association’s accident benefits fraud resources note that accident benefits fraud is the “gateway” category for organized crime activity in Canada, with synthetic patient identities and fabricated clinic billing among the documented tactics. Statistics Canada’s 2025 analysis of Canadian P&C auto insurance profitability found claims ratios peaked at 90.4% in Q3 2024 and the combined ratio exceeded 100% across multiple quarters — indicating systemic insurer incentive to deploy investigation resources on suspicious files.

How a licensed PI conducts an insurance investigation: the typical engagement

A licensed insurance PI engagement typically follows five stages:

1. Intake brief — The insurer or defence counsel provides the claimant’s file, medical records, and reported limitations. The PI reviews the claim to identify surveillance objectives.
2. Open-source pre-surveillance — The PI reviews public records and social media for inconsistencies before committing to field time. This stage identifies activity patterns and likely locations.
3. Field surveillance — Mobile or fixed observation in public places. The PI documents the claimant’s actual physical activity on video and in contemporaneous logs.
4. Evidence compilation — Footage is timestamped and logged with date, time, location, duration, and equipment used. These particulars satisfy the affidavit-of-documents requirements under Rules of Civil Procedure, Rule 30.09.
5. Written report — A signed PI report is tendered to counsel, formatted to meet the three-part admissibility test: accurate, fair, and verified on oath by a person capable of doing so.

Each stage is designed to produce evidence that will hold up if challenged at discoveries or at trial.

What investigators are legally permitted to do in Ontario

A licensed PI retained by an insurer in Ontario may:

• Conduct video surveillance in public places and from public vantage points
• Perform background and open-source research
• Interview witnesses who consent to speak
• Review publicly available records
• Conduct activity verification by observation
• Prepare evidence reports

A PI may not:

• Enter private property without consent
• Access private accounts, medical records, or communications without authorization
• Intercept private communications — which carries a penalty of up to five years’ imprisonment under Criminal Code, s. 184(1)
• Conduct any action that would constitute criminal harassment under Criminal Code s. 264

The OPC’s 2009 Guidance on Covert Video Surveillance in the Private Sector establishes six additional requirements. The PI must demonstrate a strong factual basis (suspicion alone is not sufficient). Privacy loss must be weighed against organizational benefit proportionally. Less invasive alternatives must be considered first. Collection must be limited to the minimum necessary. Bystander information must be avoided where possible. Documentation of the authorization and purposes must be maintained.

What surveillance evidence can and cannot do in an Ontario claim

In Ontario civil courts, surveillance video must pass a three-part test to be admitted as substantive evidence. The footage must accurately and truly represent the facts. It must be fair and not intended to mislead. It must be verified on oath by a person capable of doing so. Footage failing this test has been excluded: in Rolley v. MacDonell, 2018 ONSC 164, the Ontario Superior Court excluded surveillance with significant unexplained gaps in its coverage of a documented activity.

Under Rules of Civil Procedure, Rule 30.09, disclosure follows a two-track regime. If used as substantive evidence, surveillance must be produced (privilege waived) at least 90 days before trial. If used for impeachment only, it need not be produced but must be listed in Schedule B of the affidavit of documents, with full particulars provided on request before discoveries. Post-discovery surveillance requires an updated affidavit.

In Iannarella v. Corbett, 2015 ONCA 110, the Ontario Court of Appeal held that defendants must disclose all surveillance — including surveillance over which privilege is claimed — and must provide particulars (date, time, location, duration, videographer names) on request. Failing to comply and then using the footage as substantive evidence at trial constitutes “trial by ambush” and warrants a new trial.

In Nemchin v. Green, 2019 ONCA 634, the Court of Appeal refined this framework. Admissibility is assessed on a clip-by-clip basis. Technical defects such as timestamp gaps or editing go to weight, not admissibility. Courts assess whether surveillance fairly represents the claimant’s typical functional capacity — not a single atypical moment. Footage of a claimant performing an activity possible on a “good day” may be admitted without defeating the entire injury claim.

What this means if you are a claimant or an insurer in Ontario

For claimants, surveillance evidence that conflicts with testimony does not automatically defeat an injury claim. Ontario courts consistently require footage to be placed in context. Isolated activity on a “good day” does not disprove chronic pain or episodic disability. Under Nemchin, courts scrutinize whether surveillance fairly represents typical functional capacity — not a single atypical moment.

For insurers, when surveillance evidence is admitted and used to impeach a plaintiff, expert opinions that rely almost entirely on the plaintiff’s self-reported symptoms are at risk of being discounted wholesale. The Canadian Bar Association’s analysis of Petz v. Duguay (2017 ABQB 90) observes that where an expert has relied almost entirely on the plaintiff’s self-reporting — and the plaintiff ultimately lacks credibility — the expert evidence may be discounted. In that case, surveillance undermined credibility to the point that claims for housekeeping, future care, and lost earning capacity were rejected entirely.

The practical implication for both sides is the same: evidence quality and disclosure compliance determine outcome. A surveillance report that cannot satisfy Rule 30.09 particulars or the three-part admissibility test creates as much risk for the insurer as no investigation at all.

As licensed PSISA investigators operating across the Greater Toronto Area and Ontario, at Discreet Investigations our investigators conduct insurance investigation assignments for insurers and their defence counsel. We produce timestamped field video, contemporaneous observation logs, and written reports formatted to the affidavit-of-documents particulars required by Ontario courts and the LAT. Every assignment is scoped to public-space surveillance that meets the OPC’s proportionality standard. To discuss whether an insurance investigation fits your matter, call +1 (888) 680-0036 or visit our insurance investigations page — or learn more about our investigator credentials at James Glanville’s profile.

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