What is express authority?

Express authority refers to the power that is explicitly granted to an insurance agent or producer by an insurer. This authority is clearly defined in the agent's contract and outlines what actions the agent is permitted to take on behalf of the insurer. Express authority can include specific tasks like binding coverage, negotiating policy terms, and collecting premiums.

It's important to distinguish express authority from other forms of authority. For instance, implied authority, which may have been confused with express authority, is not explicitly stated but is inferred from the agent's conduct and the nature of the business relationship. Verbal agreements are often not sufficient to establish express authority, as it requires formal documentation. Furthermore, express authority does not have any annual acquisition requirement; it is typically established when the agent is contracted by the insurer. Understanding express authority is crucial for compliance and ensuring that agents operate within the bounds set by the insurer.