Express authority is the authority an insurer or agency specifically grants to an insurance agent through a contract, appointment, or direct instruction. In plain language, it is what the agent is clearly allowed to do on the insurer’s behalf.
How it works
Express authority usually comes from an agency agreement, written procedures, or formal delegation from the insurer. It may include the power to:
- solicit applications
- bind certain coverages
- issue or deliver policies
- collect premiums
- service existing accounts within stated limits
The authority is not unlimited. The contract may restrict which lines the agent can write, when binding is allowed, and which risks must go back to the insurer for approval.
Why it matters
Express authority affects whether the insurer is legally bound by the agent’s acts. It also shapes compliance, E&O exposure, and internal controls. If an agent acts outside granted authority, coverage disputes or agency-liability issues can follow.
Practical example
An insurer gives a producer express authority to bind small commercial property risks up to a stated value, but not coastal risks or vacant buildings. If the producer binds a vacant coastal account anyway, the insurer may argue that the producer acted outside express authority.