September 5, 2022

What is Endorsement in Insurance?

What is Endorsement in Insurance?


An endorsement refers to any change made to an insurance policy after it has been issued, i.e., during the policy period. These changes are made by the insurance company at the behest of the insured business to ensure that the policy is up to date.

Adding an endorsement to your existing insurance policy often means modifying or upgrading its coverage to match your business’s current needs. For example, you may feel the need to add coverage for certain risks to your Fire Insurance policy after it has already been issued. This can easily be done in the form of an endorsement. Once the endorsement has been initiated and approved by your insurance company, the policy will be updated with the new added coverage.

There are essentially two types of endorsements in Fire Insurance :

Financial Endorsements

Financial endorsements are any changes made to the coverage offered under the insurance policy. This can include changes to the Sum Insured, changes in stock value, changes to insured facilities, and so on.

Financial endorsements lead to an increase or decrease in the premiums to be paid as well. For example, a business may choose to insure a new warehouse under their SFSP Fire Insurance policy through an endorsement. This will increase the policy’s coverage and in turn lead to a higher premium.

Similarly, covers for STFI, RSMD, or any other extensions can be added to a Fire Insurance policy during the policy period if the business is particularly exposed to those perils. This kind of an endorsement also requires the payment of additional premium.

Financial endorsements, owing to their impact on insurance coverage, can take some time to be approved. This, of course, varies greatly depending on the degree of change and the insurance company.

Non-financial Endorsements

Non-financial endorsements are those that do not result in a change in insurance premium. These are typically clerical errors, or minor changes to policy particulars. Modifications like corrections to the address of the insured location or the name of the business, changes in exact location parameters, etc. are all examples of non-financial endorsements. These endorsements generally take a simpler process to materialise as the submission of required documents and proofs is enough to enact these changes.

For as long as they’ve existed, endorsements to Fire Insurance policies have largely been a task done over the phone with heaps of paperwork and needless back and forth between the insured and the representative. We have now completely done away with this through our innovative digital platform.

If you want to make an endorsement to your insurance policy purchased through Verak, all you need is your phone and an internet connection. You can then easily request any changes to your policy either through WhatsApp or through our web chat bot. You’ll have to follow these steps :

Step 1: Send ‘Hi’ to the WhatsApp Chatbot or the Web Chat bot to view the main menu

Step 2: Send ‘5’ to the Chatbot to Change policy details/Create an Endorsement request

Step 3: If you have multiple policies in your account, send the number corresponding to the policy you want to make changes to.

Step 4: The endorsement request has now been initiated, select what you want to change in your policy.

How to make an endorsement at Verak - Step 4

Step 5: Once you have selected the type of change you want to make, enter the updated information.  (For example, when selecting option 1, mention the correct pin code or address)

How to make an endorsement at Verak - Step 5

Step 6: Details are captured, you can exit chat, return to main menu or request another change in your selected policy

How to make an endorsement at Verak - Step 6

Once enacted, an endorsement will be valid for the rest of the policy period, unless another endorsement is further made. It can also be renewed with the renewal of your insurance policy.

Some endorsements, however, do come with certain limitations in terms of the validity period, depending on what the insurance company agrees to. It is necessary to understand all particulars of your endorsement so as to avoid any future confusion or difficulties during claims.

If you have any questions regarding the kind of endorsement your Business Insurance policy needs, Verak's expert insurance advisors will always be available for help. Reach out to us on WhatsApp here or call us on +91 9076277062!

Further Reading

How to file a Fire Insurance claim?

Opinions, conclusions and statements of intent expressed in this article are that of the author and Verak does not accept liability for the views expressed unless confirmed by an authorized representative of the Company independently of this communication.