Which statement about endorsements is true?

• A. They reduce the policy's aggregate limit without affecting per-occurrence.
• B. They only apply to personal auto policies.
• C. They do not affect risk transfer or coverage.
• D. They tailor coverage by adding insureds, altering limits, or adding options like Completed Operations, Additional Insureds, and hired/non-owned autos.

Answer: (D)

Endorsements are amendments to an insurance policy that tailor its coverage by changing who is insured, what is covered, and how much coverage applies. They can add insureds (such as an Additional Insured), adjust limits (increasing or narrowing them for specific coverages), and introduce coverage extensions like Completed Operations, Additional Insured status, or Hired/Non-Owned Auto. This is why the statement describing endorsements as tools that tailor coverage through adding insureds, altering limits, and providing these options is true. For example, adding an Additional Insured broadens protection to another party on a contract; a Completed Operations endorsement extends liability for work after completion; and a Hired/Non-Owned Auto endorsement covers liability from vehicles the insured does not own. Endorsements can affect risk transfer and coverage by shifting who or what is protected and under what limits, and they are not confined to personal auto policies.