Mid-term adjustments and endorsements: a broker's guide

A mid-term adjustment (MTA) is a change to a policy while it is still running, such as a new vehicle or address. In the US it is called an endorsement. To handle one well, get a complete request from the client, check whether the change alters the risk, and check the revised documents against what was agreed.

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What is a mid-term adjustment?

A policy is written for a period, usually a year. A business does not stand still for that year, so changes arrive: a van is added, a unit is leased, stock levels rise, a driver leaves. Each change needs the insurer's agreement, and the insurer may alter the premium, the terms, or both.

The work is small per change and large in total. A busy office may handle many requests a week, and each one involves reading an email, finding the policy, working out what the insurer needs, writing the request, and checking what comes back. Because each is small, the details get rushed, and the details are what go wrong.

What a change request must hold

A request that goes to the insurer incomplete comes back with questions, and the questions cost days. Before sending, make sure the request holds these things:

• The policy: client name, policy number and the insurer.
• The change itself, stated exactly: what is being added, removed or altered.
• The effective date, and whether the client wants it from today or from a date in the past or future.
• The details the insurer needs for this type of change. A vehicle needs a registration and a value. A property needs an address and a sum insured. A new activity needs a description.
• Any related changes, so one request does not contradict another already in progress.
• Who at the client's business asked for it, and when.

A made-up example: a client emails to say "we have bought a second van, please add it from Monday". The email has no registration, no value, and no sign of who will drive it. A clean request lists those three gaps and goes back to the client before it goes anywhere near an insurer. A request sent as it stands will bounce, and the client believes the van is covered from Monday while the insurer has not agreed to anything.

That last point matters most. Unless the policy says otherwise, the change is a request, not cover, until the insurer confirms. Keep a clear status on every change: asked, sent, agreed, documents received, documents checked.

Changes in the risk (UK)

Some changes are more than administration. They alter the risk the insurer agreed to carry, and in the UK that can bring legal duties into play. This section describes the law for non-consumer (business) insurance contracts in the UK. It is not legal advice, and your compliance contact should confirm how it applies to your firm.

The Insurance Act 2015 sets out the duty of fair presentation for business insurance. Section 2 says: "This Part applies to non-consumer insurance contracts only." The same section extends the duty to variations to a contract, and reads the risk, for a variation, as "changes in the risk relevant to the proposed variation". In plain English, when a business policy is varied mid-term, the insured's disclosure duty applies to the changes that are relevant to the variation, not to the whole risk all over again.

The practical consequence is that a change request is a chance to disclose, and a missed disclosure is a chance for a dispute later. If the client has bought a second van, the request should also say whether it will be used for something the first van is not, such as deliveries at night. The client knows; the broker's job is to ask.

The FCA's guidance adds a second point for UK firms. ICOBS 6.1.6 in the FCA Handbook says the appropriate information rule applies "also when mid-term changes and renewals are proposed". The appropriate information rule is about giving customers information they need to make an informed decision. It means a change should not just be pushed through. If the change affects terms, price or cover, the client needs to be told in a way they can understand. These are UK provisions for firms regulated by the FCA, and your compliance contact will know how your firm meets them.

If you work outside the UK, the same questions still apply, but the rules will differ. Do not assume that a UK rule covers you.

Checking the revised documents

When the insurer agrees, it sends revised documents: an endorsement, a new schedule, sometimes a new certificate. Check them before you tell the client all is done.

Work through the same questions each time:

• Is the policy number right, and is the named insured spelled the way the client uses it?
• Does the effective date match what was agreed?
• Is the change recorded exactly as requested, with the right registration, address or sum insured?
• Did the premium change by roughly what you were told? If not, why not?
• Did the insurer add or alter any wording, exclusion or condition you did not ask for?
• Does the new schedule still match everything else on the policy?

Note any difference, quote the line from the document, and take it back to the insurer. Compare against the last version, because a revised schedule can quietly drop something that used to be there. Our guide to checking issued policies goes through the same method for a whole policy.

Then update your own records and tell the client in plain words what has changed, from which date, and what it costs. A client who gets a clear note is less likely to ring you at claim time to ask whether the van was covered.

What stays with your team

Your team confirms the request with the client, decides whether a change needs fuller disclosure, speaks to the insurer when terms are revised, and decides whether the revised terms are acceptable. All of that is judgement, and it is the part clients pay for.

The rest is preparation: reading the email, finding the policy, listing the missing details, drafting the request, and comparing the revised documents with what was asked. It is repetitive, the pattern is the same each time, and it is easy to get wrong at four in the afternoon.

When changes are done, the next job in the cycle is usually a claim, and tracking insurance claims covers keeping one clear record. For where this fits among the other jobs in a broker's office, see AI for insurance brokers.

Can AI do this?

Yes, for the preparation. A system can read the client's email and the current policy, draft the change request, and flag missing details such as a registration. Once the revised documents arrive, it can compare them with the request. Your team confirms the request, decides on disclosure and agrees terms with the client.

Where Navicade fits

Navicade builds and runs AI systems for jobs like this one. For policy changes, a client's instructions, the current policy and the requested effective date become a draft change request, with missing details flagged. We start with a free 30-minute call and a free operations map, then take on one agreed task at a time. Results arrive in your existing tools. Insurance decisions stay with your team. The system checks its work on every run and alerts us.

See the row on preparing policy changes, or ask for the free call at our contact section.