In insurance, what does it mean to have ‘express authority’?

Having "express authority" in insurance refers to the specific authority that is clearly and explicitly granted to an agent or producer, typically outlined in writing. This can be detailed in the agent's contract, internal company policies, or other official documents that delineate exactly what the agent can do—such as binding coverage, collecting premiums, or making underwriting decisions.

This type of authority is crucial because it establishes clear parameters for what the agent is authorized to act on behalf of the insurer, ensuring both accountability and compliance with regulatory requirements. On the other hand, authority that is inferred from actions, based on established practices, or assumed by client reputation represents different forms of authority that may not be directly articulated as the agent’s clear mandate. These forms of authority can lead to misunderstandings in terms of what an agent can or cannot do in their role. Therefore, express authority is vital for maintaining clear and effective communication between insurers, agents, and clients.