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ENDORSEMENTS
INTRODUCTION
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.
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
License Endorsements
License endorsements give additional rights or privileges to the license holder. For
example, a driver may obtain a motorcycle endorsement on a drivers license, certifying he
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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 persons
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.
The type of endorsement that is required on any type of joint account. Checks that are
payable to more than one party often require this joint endorsement. Joint endorsements are
generally required in order to prevent one individual on a joint account from cashing a check
without the knowledge or permission of the other.
Joint endorsements are usually required by banks before they will cash certain kinds
of checks. Checks issued by the U.S. Government, such as tax refund checks, typically fall
into this category. Joint endorsements can be required regardless of whether the underlying
account is "tenants in common," "tenants with rights of survivorship" or "tenants by the
entirety."
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BREAKING DOWN 'Blank Endorsement'
Bank endorsements are common in international trade, where the business parties are
typically unknown to one another. Banks stand in the middle by assuring good funds to the
recipient. A bank endorsement, in the case of a banker's acceptance, for example, is the
equivalent of a guarantee. An insurance policy endorsement that extends workers'
compensation coverage to other companies that the primary insured may do business with.
Alternate employer endorsement lists other companies that are to be included in the policys
coverage in the policys endorsement schedule.
Businesses may find themselves short staffed on occasion, and will seek out the
services of a temporary employment agency to fill the gaps. Workers that are employed
through the temporary employment agency are covered under the workers' compensation
policy that the agency has purchased. When the employee is hired out to an outside firm, the
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firm that hires the employee will seek an alternate employer endorsement in order to protect
it from any lawsuits that the temporary employee may suffer.
A check or draft that must be paid via endorsement and delivery. Pay-to-order
instruments are negotiable checks or drafts that are generally written as "pay to X or order."
These instruments stand in contrast to pay-to-bearer instruments, which do not require
endorsement.
Businesses often work with a variety of contractors, subcontractors, and other product
and service providers in order to complete jobs. For example, a construction company may
contract out work to electricians, structural engineers, and HVAC professionals to complete
specific components of a building
Blank or General:
Special or Full:
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If the endorser signs his name and adds a direction to pay the amount mentioned in
the instrument to, or to the order of a specified person, the endorsement is said to be special
or in full.
CONCLUSION
A bill made payable to Sohan or Sohan or order, and endorsed pay to the order of
Sohan would be specially endorsed and Sohan endorses it further. A blank endorsement can
be turned into a special one by the addition of an order making the bill payable to the
transferee. An endorsement is restrictive which prohibits or restricts the further negotiation of
an instrument. Examples of restrictive endorsement: Pay A only or Pay A for my use or
Pay A on account of B or Pay A or order for collection.
REFERENCES
http://www.investopedia.com/terms/e/endorsement.asp
https://caknowledge.in/types-of-endorsements/
http://www.shareyouressays.com/92277/seven-important-kinds-of-endorsements
http://vle.du.ac.in/mod/book/view.php?id=8409&chapterid=10737
http://moneyservicesbusiness.com/msb-services/check-cashing/endorsements/