Insurance endorsements

An insurance endorsement (or rider) modifies a small business insurance policy to either add, delete, or exclude certain types of coverage. It allows you to customize your policy to better fit your needs or budget without having to shop for – and buy – a new policy.

Insurance endorsements allow you to buy insurance that better fits your needs. For example, if a policy you’re considering doesn’t protect a key risk, person, or entity, you can ask your agent to add an endorsement that adds the missing protection.

Conversely, if a policy includes coverage you don’t need, you can request an endorsement to remove it, which could save you money.

Here are several common insurance endorsements that small business owners use to customize their policies:

Additional insured endorsement adds someone other than you to your insurance policy – most often general liability insurance. It extends your insurance to a third party, such as a subcontractor doing work for you. This would protect that entity against third-party lawsuits or commercial property damage.

Extended reporting period endorsement (also called tail coverage) modifies a claims-made professional liability (errors and omissions insurance) policy so you can report claims even after the expiration date of your insurance policy.

Prior acts coverage endorsement modifies a claims-made liability policy to protect you against losses that occurred before you bought your current policy.

Equipment breakdown endorsement modifies your commercial property insurance policy so that it can generate funds to repair or replace machinery or equipment that has suffered a sudden and accidental malfunction, such as a short circuit, loss of air pressure, or power surges.

Accounts receivable endorsement can be added to your commercial property coverage to protect your small business from financial losses when you can’t collect money from clients or customers, or when your accounts receivable records have been damaged or destroyed in a covered loss.

Electronic data processing (EDP) endorsement is normally added to a business owner's policy (BOP) and helps cover your electronic data processing equipment, such as computers and backup systems, against data loss during a power surge, fire, natural disaster, or similar incident.

Electronic data liability endorsement expands your property damage liability coverage to include a loss of data caused by accidental damage to a customer’s computer, hard drive, or other data storage equipment. Social engineering attacks manipulate employees into transferring funds or revealing sensitive information. Certain cyber or crime insurance endorsements may help address these attacks.

While cyber liability insurance usually covers data lost from a targeted software attack, electronic data liability insures a data loss when there’s accidental physical damage to a network or storage device.

You can request an insurance endorsement when you are shopping for a new policy or at any point in your existing coverage’s policy period. Or you can request one when your policy comes up for renewal. Just ask your Insureon agent for assistance.

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