Which type of authority allows an agent to act based on past actions or circumstances?

Implied authority refers to the rights and powers that an agent possesses, which are not explicitly stated in a written agreement or verbally communicated. Instead, this type of authority is inferred from the agent's previous actions, the nature of the role, or the circumstances surrounding the agent's duties. For instance, if an agent has previously completed certain actions as part of their job that are deemed necessary to fulfill their responsibilities, it can be reasonably assumed that they have the authority to continue performing those actions without needing explicit permission each time.

This concept is essential in the insurance industry, where adjusters might need to act swiftly to secure a claim or manage relations with policyholders based on their prior conduct or established norms. Recognizing that implied authority is derived from the context of previous actions helps clarify the agent's operational boundaries and outlines what can be expected in terms of their decision-making.

The other types of authority involve different nuances: express authority is clearly defined either in writing or verbally, while apparent authority relates to the perception created for third parties about an agent's power to act. Written authority is a more formalized documentation, but it doesn't pertain to actions inferred from prior behavior. Understanding these distinctions helps in grasping the broader spectrum of authority in agency relationships.