An Endorsement is a term used to describe an amendment to a policy document. An endorsement is sometimes referred to as an Addendum.
Its purpose is to record any change to the original terms of the insurance so as to reflect the negotiated agreement between the parties. An endorsement may either be attached to the policy or included in the policy document, usually towards the back. It may be used to vary the terms of a standard policy in which case it will be attached from the inception of the cover or it may be added to the policy during the term of the policy to reflect a mid-term change in the cover.
Endorsements are usually used to
- Extend cover
- Restrict cover
- Exclude cover
- Clarify intentions
Endorsements are part of the contract of insurance and are governed in the same way; by contract law.
If a policy has been amended by endorsement at inception then it will override the original terms of the policy, as applicable, to reflect the true intention of the parties to the contract. It will be assumed (in law) that the amendment was a deliberate act and the effects of the change had been considered and were intended.