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What is an 'Endorsement'

The term endorsement has a variety of meanings depending on the context in which it is used. An endorsement can be a legal term that refers to the signing of a document that allows for the legal transfer of a negotiable from one party to another; it can also refer to an attachment to a document that amends or adds to it. Typically, an endorsement is an added provision to an insurance policy, referred to as a rider, though it can also include additional options such as various license endorsements.

BREAKING DOWN 'Endorsement'

An endorsement may relate to a statement of support issued by a person or group. This support may be given to another person, such as a political candidate, or a product.

Check Endorsements

When an employer signs a check, it is endorsing the transfer of money from the business' account to the employee. The act of signing the check is considered an endorsement, and is considered proof of the intent of the payer to transfer funds to the payee.

Insurance Endorsements

Insurance endorsements function as add-ons to the original agreement. If an insurance contract has a provision stating that in the event of the policy holder's death, the family of the policy holder will continue to receive the policy holder's monthly income for a period of time, this is an example of an endorsement or a rider. Endorsements and riders cause the price of the premium to rise as they provide a positive benefit.

License Endorsements

License endorsements give additional rights or privileges to the license holder. For example, a driver may obtain a motorcycle endorsement on a driver’s license, certifying he has completed the necessary steps to be legally permitted to operate a motorcycle on public roads. Endorsements of this nature may refer to the types of vehicles that can be operated, as well as the type of cargo the vehicle may hold while being operated by the license holder.

The counter to a license endorsement is a restriction. A restriction places a caveat on the person’s right to operate a vehicle, such as with corrective eyewear restrictions for those whose natural vision does not meet minimum requirements without the use of glasses or contact lenses.

Endorsements as Public Support

When using an endorsement as a form of approval, a person or entity states his support of a particular person, product or service, most commonly through a public mechanism. This form of endorsement can include a political figure publicly supporting another person who is running for a position or an industry expert showing support for a particular product that has become available.

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