Which statement about express authority is true?

Which statement about express authority is true?

• A. Express authority is explicitly granted by the insurer
• B. Express authority is inferred from the agent's actions
• C. Express authority is never written
• D. Express authority is only through law

Answer: (A)

Express authority is the authority that the insurer explicitly grants to the agent, usually laid out in writing in the agency agreement or appointment. This means the insurer clearly tells the agent what they are allowed to do on the insurer’s behalf—binding coverage, issuing policies, endorsing forms, and similar actions. This is different from implied authority, which comes from the agent’s role and necessary actions to perform their job, and from apparent authority, which arises when a third party reasonably believes the agent has authority based on the insurer’s representations. So, the true statement is that express authority is explicitly granted by the insurer. It isn’t something inferred from the agent’s actions, it isn’t never written, and it isn’t something granted only by law.

Express authority is the authority that the insurer explicitly grants to the agent, usually laid out in writing in the agency agreement or appointment. This means the insurer clearly tells the agent what they are allowed to do on the insurer’s behalf—binding coverage, issuing policies, endorsing forms, and similar actions. This is different from implied authority, which comes from the agent’s role and necessary actions to perform their job, and from apparent authority, which arises when a third party reasonably believes the agent has authority based on the insurer’s representations. So, the true statement is that express authority is explicitly granted by the insurer. It isn’t something inferred from the agent’s actions, it isn’t never written, and it isn’t something granted only by law.