What term describes the powers directly given to a producer in an agency contract?

The term that describes the powers directly given to a producer in an agency contract is "express." This is because express authority refers to the specific powers and duties that are clearly outlined in the agency agreement. When a producer has express authority, they have the explicit right to act on behalf of an insurance company to perform specific tasks, such as binding coverage or issuing policies. This authority is usually articulated in writing and serves to guide both the producer and the insurer regarding their respective rights and obligations within the contractual relationship.

In contrast, implied authority refers to the powers that are not explicitly stated but are necessary for the producer to carry out their duties and functions effectively. Apparent authority arises when a third party reasonably believes that the producer has authority based on the actions or representations made by the insurer, despite there being no formal agreement stating such authority. Assumed authority might refer to situations where a producer acts in a way that leads others to assume they have authority, but this term is less commonly used in insurance contexts compared to the others mentioned. Understanding these distinctions is crucial for anyone working in the insurance field, as it helps clarify the scope of a producer's role and the limitations of their authority.