Underwrites

Part of speech: verb

Definitions

1. Offers financial support or backing to a project or entity ; guarantees or assumes financial risk in a contract or insurance policy
2. Provides funding or backing to cover costs or investments ; accepts responsibility for potential losses in underwriting agreements
3. Supplies financial aid or sponsorship for an activity or venture ; commits to bearing risk involved in transactions or insurance underwriting

Etymology: "Underwrites" is the third-person singular present form of "underwrite," so the story belongs to the verb. Its original sense was literal: Old English "underwrītan" meant to write at the foot of a document, to write beneath something as a signature or endorsement. Signing your name below a text was a way of vouching for it, and that gave the verb its later meaning of guaranteeing something. Over time the sense moved from the physical act of writing underneath to the idea of backing a commitment, first with a signature and then with money. The financial sense grew from that signing habit. Someone who underwrote a document accepted responsibility for its contents, and insurers and lenders later used the same idea: by putting their name under a risk, they took on its liability. Modern usage keeps this, so an investment bank that underwrites a share issue guarantees to buy any shares the public does not take up.

Synonyms: guarantees, insures, backs, supports, finances