Which document serves as a description of what the broker has put into effect?

The correct choice is the cover note. A cover note is a temporary document that acknowledges the receipt of an application for insurance and outlines the basic terms of coverage that the broker has arranged on behalf of the insured. It serves as a way for the broker to communicate to the client that they have taken steps to secure insurance coverage, detailing the specifics of the protection that has been put into effect prior to the issuance of a formal policy.

This document is essential because it provides immediate assurance of coverage, even before the full policy is issued. It often includes critical information such as the type of insurance, coverage limits, and the duration of the coverage. This makes it a vital communication tool within the insurance process, especially in situations where time-sensitive coverage is necessary.

In contrast, a policy document is a more formal contract of insurance outlining all the terms and conditions agreed upon by the insurer and the insured. A binder serves as a more formal agreement that ensures coverage is in place and is typically a short-term insurance contract until the actual policy is finalized. Lastly, an endorsement is an amendment or addition to an existing insurance policy that alters its terms or coverage but does not serve as an initial description of what is in effect.