What type of authority is assumed by an agent to transact insurance business without being explicitly stated?

Implied authority refers to the type of authority that is not explicitly stated but is assumed by an agent based on the duties and responsibilities of the position they hold. In the context of insurance, this means that while an agent may not have specific instructions or written consent to perform certain actions, their role within the organization provides them with the expectation to carry out those actions as part of their job.

For instance, if an agent is authorized to sell insurance policies, they typically have the implied authority to undertake actions necessary to facilitate the sale, such as answering client questions, processing paperwork, or making minor policy adjustments. This authority is understood from the context and established practices within the industry.

Express authority, on the other hand, is clearly defined in a contract or agreement, outlining specific powers granted to the agent. Apparent authority is the perception created in the minds of third parties about the agent's ability to act on behalf of the insurer, based on the actions of the insurer or the agent. Limited authority restricts the agent's powers to specific tasks or activities, rather than granting broader discretionary powers, as implied authority does. Understanding these distinctions helps clarify the different types of authority agents may operate under in the insurance field.