What is Endorsement

Endorsement is a term that has various definitions depending on the context of its use. For example, a signature authorizing the legal transfer of a negotiable instrument between parties is an endorsement.  Endorsements can be an amendment to a contract or document such as a life insurance policy or a driver's license. A public declaration of support for a person, product, or service is also an endorsement. 

1:11

Understanding Endorsements

BREAKING DOWN Endorsement

 

Signature Endorsements

When an employer signs a payroll check, it authorizes or endorses the transfer of money from the business account to the employee. The act of signing the check is considered an endorsement, which serves as proof of the payer's intent to transfer funds to the payee.

Insurance Endorsements

Insurance endorsements are amendments in the form of modifications of or additions to the original policy. For example, a policy provision continuing monthly income to a beneficiary after the death of the insured is an example of an endorsement and is also known as a rider. Typically, this type of endorsement increases the policy premium due to the added benefits to the policyholder and beneficiary(ies) and the increased risk to the insurer.

License Endorsements

License endorsements give additional rights or privileges to a licensee. For example, a driver who obtains a motorcycle endorsement on a driver’s license is permitted to operate a motorcycle on public roads. License endorsements also refer to the types of authorized vehicles or to the type of cargo a vehicle may carry.

The opposite of a license endorsement is a restriction. A restriction places a caution on the person’s right to operate a vehicle, such as with corrective eyewear restrictions. Eyewear restrictions are for those people whose natural vision does not meet minimum requirements for vehicle operation without the use of corrective lenses.

Endorsements as Support

For endorsements as forms of approval, a person or entity makes a public declaration of support for a person, product, or service. Most commonly, this is in the form of a government official or influential person supporting a political candidate or an industry expert supporting a new product, service, or concept.