What type of authority is written into the producer's agency contract?

Express authority refers to the explicit powers that are granted to a producer through their agency contract. This type of authority is clearly stated in the contract and outlines the specific actions that the producer is authorized to take on behalf of the insurer. It is based on the direct agreement between the insurance company and the producer, ensuring that both parties are aware of the limits and scope of the producer's capabilities.

Express authority is crucial for establishing the legal relationship between the producer and the insurer, as it provides clarity and structure to their professional interactions. Since express authority is explicitly outlined, it helps mitigate misunderstandings and disputes regarding the producer's ability to bind coverage, negotiate claims, or handle other essential tasks on behalf of the insurer.

Understanding express authority is vital for anyone involved in the surplus lines insurance market, as it delineates the responsibilities and expectations that drive effective agency operations.