The authority granted to an agent through the agent's contract is referred to as...

The authority granted to an agent through the agent's contract is referred to as express authority. This type of authority is clearly defined and explicitly stated in the contract between the agent and the principal. It includes specific powers that the agent is allowed to execute on behalf of the principal, such as signing policies, collecting premiums, and other actions that are expressly detailed in the agreement.

Express authority is significant because it provides clarity and sets boundaries for the agent, ensuring that both parties understand the scope of the agent's responsibilities. The agent acts within these powers and is accountable to the principal for decisions made under this authority.

In contrast, other forms of authority, such as implied authority, would refer to powers that an agent is assumed to have based on the nature of the agency relationship, while apparent authority is related to the perceptions of third parties regarding the agent's ability to act on behalf of the principal. Inherent authority is not a commonly used term in this context. Understanding these distinctions helps clarify the legal nuances of agency relationships in the insurance marketplace.