In insurance, implied authority refers to an agent's authority to act beyond their express or written authority, as long as such actions are reasonably necessary to carry out their duties and responsibilities. This authority is assumed to exist based on the agent's position, past actions, or the customs of the industry.
For example, an insurance agent who has been authorized to sell auto insurance may have implied authority to make minor changes to a customer's policy, such as updating their contact information or adding a new driver to their policy. Implied authority may also be assumed when the agent has acted in a certain way in the past and the principal (the insurance company) has not objected to those actions.
Key features of implied authority include:
• It is not explicitly granted or stated in writing, but is assumed to exist.
• It arises from the agent's position and past actions.
• The agent must act within the scope of their duties and responsibilities.
• The insurance company is responsible for the actions of their agent, even if the agent exceeded their express authority.
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