What type of authority is defined as the authority written in the producer's contract?

The authority defined as the authority written in the producer's contract is known as express authority. This type of authority is explicitly stated in the contractual agreement between the insurance producer and the insurance company. It details the specific rights, powers, and responsibilities that the producer has in their role, including the ability to bind coverage, collect premiums, and perform other duties on behalf of the insurer.

Express authority is fundamental because it establishes clear guidelines for the conduct of the producer within the scope of their professional activities, ensuring that both the insurance company and the producer operate within defined parameters of their relationship. This clarity helps prevent misunderstandings and disputes regarding what actions the producer can or cannot take while representing the insurer.

In contrast, implied authority refers to the powers that the producer has which are not explicitly stated but are necessary to carry out the duties spelled out in the express authority. Apparent authority occurs when a third party perceives that the producer has authority, based on the actions or representations made by the insurer, even if that authority is not actually granted. Inherent authority typically refers to the authority that is naturally associated with a position or role, regardless of specific contractual language.