Which clause allows insurers to automatically broaden coverage without an endorsement?

The Liberalization Clause is a provision in insurance policies that allows insurers to automatically broaden coverage to include new benefits or enhancements without requiring a formal endorsement or additional premium. This clause is beneficial for policyholders because it ensures that they can receive updates in coverage that result from changes in the insurer’s standard policies, thereby maintaining relevance and adequacy of coverage in response to evolving risks or regulatory changes.

For example, if an insurance company enhances its policy offerings to include coverage for a new type of risk that previously wasn't covered, the Liberalization Clause would automatically apply these enhancements to all existing policies that are in effect at the time of the change. This reinforces the insurer’s commitment to providing the most comprehensive protection available without requiring policyholders to take any extra steps or incur additional costs.

The other options focus on different aspects of the insurance policy. The Cancellation Clause pertains to the conditions under which a policy can be terminated, the Exclusion Clause delineates what is not covered under the policy, and the Assignment Clause addresses the transfer of rights or duties under the policy. Each of these clauses serves a distinct purpose that does not relate to the automatic broadening of coverage like the Liberalization Clause does.