Adding Endorsements to Your Small Business Insurance

By TJ Schmakel   |  06/25/2020

Business Owner’s Policies (BOP) and General Liability insurance are great basic policies for covering your small business’s risks, but as your business adapts to changes in market conditions, operations, staffing, and more, your starter policy may need some extra oomph to ensure your business is sufficiently covered in the event of a qualifying incident. That’s where insurance endorsements come in to offer custom coverage that can be easily added to your existing policies.

What is a Business Owner’s Policy or BOP?
A business owner’s policy is the bundling of commercial property insurance and general liability insurance into one, more affordable package. A BOP protects you when your business is sued or faces damages.

What Are Insurance Endorsements?

Insurance endorsements are modifications, additions, or exclusions to an original or existing insurance policy. A policy endorsement functions to broaden the scope of your coverage, extend your policy limits, and exclude or delete certain parts of the coverage in your existing insurance policy.

Why Are Endorsements Important?

As your business grows and changes from month to month, a policy that originally covered your operational risks may no longer be adequate for your new exposures. Endorsements allow policy owners to supplement missing protection by adding new exposures, locations, and entities to the policy. Additionally, endorsements can be removed from your policy if they are no longer necessary for covering your operations.

Adding endorsements to existing policies is a flexible way to adapt your coverage as your operations grow. As a small business owner, you can personalize your policies by adding endorsements that precisely fit your business needs.

For instance, Lotus Coffee Shop is opening a new location in June 2020, and the owner wants to ensure the new location is adequately covered. Instead of drafting a new, separate policy for the second location, the Lotus Coffee Shop owner will add the new location as an endorsement to their existing BOP.

Do Endorsements Expire?

Yes, an endorsement is a document attached to the original policy and is valid only for that particular policy period. Both your original policy and any endorsements added to it can be renewed annually through your broker.

What Are Some Common Endorsements?

Additional Named Insured

This endorsement adds an additional insured – a person or an organization who works for you – to your insurance policy (typically a commercial general liability or commercial property policy). Adding a named insured to your policy extends protection to the individual or organization against third-party lawsuits.

Changing Your Address or Adding a New Business Location

This endorsement extends the protection to your new location in addition to your current location, and/or deletes your old location if you simply change your business’s address. Depending on your location, your premium rate might also change.

Increasing/Decreasing Business Personal Property Limits

This endorsement increases or decreases the limits of business personal property – or moveable objects owned by your business such as office supplies, furniture, technology, and heavy equipment – within your policy.

How Can I Add Endorsements to My Policy?

Adding or removing endorsements from your basic policy is as simple as speaking with your broker. As a business owner, you can alter your coverage anytime during your current policy period or during a natural period of change like policy renewal or purchasing a new policy.

With Layr, you can add endorsement coverages to an existing policy or get covered for the very first time. With a 100% online application, Layr works to get you a custom quote for the coverage you need. All of the partner carriers at Layr are rated “A” or better, meaning your policies are backed by trusted companies with histories of paying claims.