What is the relationship called when the insurance company gives authority to an agent?

The correct answer is "Agency," which describes the relationship formed when an insurance company grants authority to an agent to act on its behalf. In this context, the agent is empowered to represent the insurer in various capacities, such as facilitating transactions, offering advice, or managing policies for clients. This relationship is crucial in the insurance industry, as it establishes a legal basis for the agent to bind the insurer to certain obligations and actions taken in the course of their professional duties.

In contrast, "Authority" alone does not encapsulate the full nature of the relationship, as it merely refers to the power granted to perform specific tasks rather than the broader legal connection established through agency. "Representation" indicates a similar concept but is more general and can apply beyond insurance to any scenario where one party represents another, lacking the formal contractual nuances of an agency relationship. Finally, "Indemnity" refers specifically to a security or protection against financial loss, which does not relate to the delegation of authority between the insurer and the agent.