FRIDAY, NOVEMBER 13, 2020
What Are Endorsements?
Business insurance is a complex product. It needs to provide a wide range of coverage options for companies. Yet, no one policy fits everyone’s needs perfectly. That is where endorsements come in. They provide a way to alter the existing policy or update it to better match the company’s needs at any given time. Endorsements are an add-on or change to a policy. You should know about them before you sign any contract for a policy. Here’s how they work.
By definition, an endorsement is an amendment to an existing business insurance policy. It can add, delete or otherwise modify the coverage within that policy. In some cases, it can create an exclusion. In others, it can add specific protection for some asset you own. The insurance agent can add an endorsement at nearly any time, in the middle of a policy or when you renew them. The key is not necessarily worrying about how it works, but rather what the endorsement says. You should understand what they are and how they impact your coverage.
What Are Some Common Endorsements for Business Insurance?
In short, policy modifications through endorsements can span a wide range of things. If there is any need to change, update, or delete components of the policy, this is how you can do so. Here are a few examples of endorsements and how they may work.
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After an accident involving a specific employee, the insurance company may want to issue an endorsement to not cover that employee. For example, after a car accident in which the employee caused significant damage.
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An endorsement can add specific coverage and protection for a new piece of expensive equipment the company purchases. This is beneficial when that equipment is valuable beyond the existing coverage limits.
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Endorsements can be as simple as an address change. You may want to use one to help update the location or clarify the business’s actions.
Most of the time, an endorsement happens after you need to make a change to a business insurance policy. You can call the agent you are working with to help you do this. Or, if the agent wants to make changes to the policy, he or she may contact you.
In most cases, both parties must agree on the endorsement to make it legally binding. However, if you do not agree to the terms proposed by the agent, you may no longer be able to maintain the policy long term. Endorsements are an important component of your coverage. You should know what they are.
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