What is an "endorsement" in an insurance policy?

An endorsement in an insurance policy serves as an amendment that modifies the original terms or coverage limits. This means that when an endorsement is added, it officially alters the policy, which can include changes to the coverage amounts, types of coverage, or specific conditions that apply. For instance, a policyholder may request an endorsement to add a new coverage option, such as riders for specific events or expansions of protection for certain assets.

This flexibility is essential for policyholders who need to adjust their coverage based on changing circumstances or needs, ensuring that their insurance remains relevant and adequate. Endorsements are typically documented formally and attached to the original policy, providing legal clarity regarding the effective terms of coverage.

In contrast, the other definitions highlight different concepts entirely: cancellation notices inform policyholders about the termination of a policy, while secondary policies linked to primary coverage refer to supplementary insurance arrangements. Additionally, tax benefits from a policy concern financial implications rather than the structural design of the insurance policy itself.