Posted on May 17, 2014
Insurance brokers and companies have their own way of communicating that doesn?t always make sense to the world outside of the industry. Sometimes the technical language of commercial insurance policies or jargon used in discussing coverage can confuse business owners.
One such term businesses often encounter when reviewing or discussing their policies is the business insurance endorsement. A business insurance endorsement is simply an added document that attaches to an existing insurance policy. Its purpose is to modify or make changes to the coverage of the original policy contract. Typically endorsements will add additional coverage that wasn?t available when the policy was written. Sometimes endorsements are also called a rider or addendum to an insurance policy.
An example of an endorsement as it applies to the construction industry is when a general contractor requires a subcontractor to add them as an additional insured on the subcontractor?s general liability policy. This means that should property damage or injury occur on the job site, the subcontractor?s policy is adding protection of the general contractor. This coverage would be added by using a business insurance endorsement to the policy.
The same applies for commercial property insurance. If a business owner decided that they wanted to add valuable records protection or theft (if it wasn?t already included), the broker or insurance company would add that coverage by endorsement. When records or lost or stolen, the endorsement adds the coverage to the property insurance policy so that it is protected.