What is the primary function of endorsements in an insurance policy?

Endorsements serve a crucial role in insurance policies by allowing modifications to the terms, conditions, or coverages stipulated in the original contract. This flexibility is essential for both insurers and policyholders, as it enables the tailoring of policies to better meet the specific needs or circumstances of the insured. For instance, endorsements can add coverage for certain risks that may not have been included in the original policy or can adjust limits and deductibles based on evolving situations.

Given the nature of endorsements, they are particularly important when changes in a policyholder's environment or requirements occur, effectively ensuring that the coverage remains relevant and adequate. This capability to adjust the foundational aspects of an insurance policy distinguishes endorsements from other functions like policy renewals, claims payments, or premium discounts, which do not alter the existing terms of coverage.