What term describes the specific authority given to an agent by an insurance company stated in the agency agreement?

The specific authority given to an agent by an insurance company, as outlined in the agency agreement, is referred to as express authority. This type of authority is explicitly stated, either through written documentation or verbal communication, and delineates the exact powers and responsibilities assigned to the agent.

Express authority establishes a clear framework within which the agent can operate, allowing them to perform tasks such as binding coverage, issuing policies, or handling claims, as authorized by the insurance company. Because this type of authority is clearly defined, it creates a mutual understanding between the agent and the insurance company, ensuring that both parties know the extent of the agent's abilities.

In contrast, implied authority arises from the actions or circumstances surrounding the agent’s role, suggesting authority beyond what is expressly defined. Apparent authority pertains to the perception of authority that third parties may have based on the agent's behavior or the representation of the company, which may not actually be sanctioned by the insurance company. Legal authority, while a broader term related to the lawful powers conferred to an agent, does not specifically address the formal delegation of powers through an agency agreement as express authority does.