Which type of authority is typically documented within a producer's contract with an insurer?

Express authority is the type of authority that is explicitly documented within a producer's contract with an insurer. This means that the insurer clearly outlines the specific powers and responsibilities granted to the agent or producer in the contractual agreement. This authority enables the producer to act on behalf of the insurer in accordance with the terms explicitly stated in the contract, allowing them to perform actions such as binding coverage, collecting premiums, or issuing policies.

In contrast, implied authority arises from the actions and conduct of the producer, where certain responsibilities are assumed based on the role they fulfill, even if not explicitly stated in the contract. Apparent authority involves the perception from third parties that the producer has the authority to act on behalf of the insurer, which can be misleading if not backed by express authority. Limited authority refers to a specific constraint placed on the producer's powers, but it does not encompass the broad documentation of powers as express authority does. Therefore, the clear documentation of express authority ensures that both the producer and the insurer have a mutual understanding of the responsibilities and permissions involved in their relationship.