Surplus Lines - Agents and General Rules of Agency

The Agent Principal Relationship

An agreement in created by writen contract; A contract is required because a producer (known as the agent) represents the company (known as the principal) and the company is legally responsible for the actos of its producers

Actual/Expressed Authority

Authority is specified in the agent's contract (written authority); this is the clearest source of authority

Apparent Authority

Occurs if the agent takes actions beyond the scope of the written agreement, and the company does not take action to stop or correct

Implied Authority

Occurs when the agent, in the conduct of his normal business routine, identifies and implies that he is operating wihtin the guidelines established by the agency contract

Agent Responsibilities to the Applicant/Insured

The agent is under a duty to evalute the applicant's insurance needs and recommend the most suitable insurance product that meeds this need.

Fundamental Concept of Agency

When a company performas and act through an agent, the court consider the act performed by the company