What do endorsements in an insurance policy do?

Endorsements in an insurance policy serve the critical function of adding, deleting, or modifying the terms of the existing contract. They are used to tailor a policy to better meet the specific needs of the insured or to accommodate changes in the circumstances surrounding the insurance coverage. For example, if a policyholder purchases a new vehicle or adds a new location for business coverage, an endorsement can be added to ensure that the new asset is covered under the existing policy.

Endorsements can also be used to change coverage amounts, adjust deductibles, or update the terms of coverage based on new regulations or shifts in risk exposures. This flexibility is crucial for both the insurer and the insured, allowing for adjustments in response to evolving needs throughout the policy term.

To clarify the context of why the other options do not represent the function of endorsements: while a list of mandatory terms may be included in a policy, it does not directly relate to what endorsements do. Similarly, general policy conditions are typically part of the main policy structure rather than something changed through endorsements. Limits of liability are defined within the original terms and conditions of the policy, though endorsements can sometimes adjust these limits; however, they do not primarily outline them. The central role of endorsements remains their ability to