Apparent Authority

Published: | Updated: November 5, 2017

Definition - What does Apparent Authority mean?

Apparent authority it when a person is believed to have authority even though they actually do not.

Insuranceopedia explains Apparent Authority

In the context of insurance, apparent authority often comes into play if a person is given an insurance quote by someone who does not have the actual authority to issue one, which can create legal dilemmas.

Companies can be held legally liable for things that are expressed under apparent authority. For example, if a customer service agent who is not authorized to provide insurance gives a quote to a customer, then the insurance company could be forced to sell the policy at the quoted price. These oral contracts can have weight even if there is no actual authority backing them.

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