What Does Agency by Ratification Mean?
Agency by ratification is authority that is granted to someone by retroactively authorizing their unauthorized acts, either officially or through some action that implies ratification.
The company that accepts the agent's actions then becomes responsible for any consequences that result from the acts, including being liable for any contracts made by the agent.
Insuranceopedia Explains Agency by Ratification
One agency by ratification scenario occurs when an insurance company takes on the responsibility for someone who purportedly acted on their behalf. For example, an insurance company accept premium payments for a life insurance policy that was sold by an agent who was not authorized to solicit the application. If they do so in full knowledge of the agent's misdeeds, this receipt of premiums constitutes a ratification of the agent's act, making the company liable for the insurance policy that agent sold.