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  2. Insurance Terms Starting With E

Express Authority

What is Express Authority?

Express authority, within the realm of insurance, refers to a legal concept that may refer to the explicit powers and permissions granted by an insurer to an agent or representative. It is a term commonly used to describe the authority explicitly given to an agent through a written agreement or contract, outlining the scope and limitations of their powers.

Express Authority in More Detail

The definition and meaning of express authority lie in the specific terms and conditions outlined in the agreement between the insurer and the agent. This written agreement serves as a reference point for the agent’s actions and decisions on behalf of the insurer. It delineates the extent to which the agent is authorized to act, make representations, and bind the insurer to contracts or agreements.

Express authority allows the agent to conduct various activities on behalf of the insurer, such as soliciting and selling insurance policies, collecting premiums, and issuing policy documents. The agent’s actions within the scope of express authority are considered legally binding on the insurer, creating a contractual relationship between the insured and the insurer.

For instance, if an insurance agent is explicitly authorized to issue policies up to a certain coverage limit, any policy issued within that limit will be deemed valid and enforceable by the insurer. Conversely, if an agent exceeds their express authority by issuing a policy that exceeds the prescribed coverage limit, the insurer may be able to challenge the validity of the policy.

It is important to note that express authority is limited to the specific powers and permissions explicitly granted in the written agreement. Any actions or representations made by the agent outside the scope of express authority may not be binding on the insurer and could potentially create legal challenges or disputes.

Express authority is a fundamental concept in insurance, as it establishes clear boundaries and expectations between the insurer and its agents. It provides a framework for the agent’s actions, ensuring compliance with legal and regulatory requirements while safeguarding the interests of the insured and the insurer.

In summary, express authority in insurance refers to the explicit powers and permissions granted to an agent through a written agreement. It outlines the agent’s scope of authority and activities they are authorized to undertake on behalf of the insurer. Understanding and adhering to the terms of express authority is crucial for agents to act within the bounds of their authority and for insurers to establish a legal relationship with policyholders.