What is an 'endorsement' in an insurance policy?

An endorsement in an insurance policy refers to an addition or change to the original policy. This means that it modifies the terms of the coverage or adds new provisions, which can be essential for tailoring the policy to the specific needs of the insured party. Endorsements can be used to add coverage for new risks, remove coverage that is no longer needed, or clarify specific terms in the policy.

By allowing modifications, endorsements enhance the flexibility of insurance policies, ensuring that they meet the evolving needs of policyholders as their circumstances change. This adaptability is a significant aspect of how insurance products are structured to protect individuals or businesses in accordance with their specific requirements and situations.