An agent performs an action not explicitly allowed in their contract. If the insurer is aware of this but does not intervene or correct the agent, what type of authority has the insurer effectively granted?

Apparent authority occurs when a third party is led to believe that the agent has the authority to act on behalf of the insurer, based on the insurer’s conduct. While the insurer's awareness of the agent's actions may contribute to apparent authority, it does not directly relate to the insurer's failure to intervene, which is indicative of implied authority rather than apparent authority.

Contract authority refers to the specific powers granted to the agent as outlined in the contractual agreement with the insurer. Since the agent acted outside the bounds of the contract, this type of authority is not applicable. The insurer’s failure to correct the agent's actions indicates a broader interpretation of authority rather than strictly adhering to the contract.

Express authority is explicitly stated in the contract between the insurer and the agent. Since the agent's actions were not explicitly allowed, express authority does not apply. The insurer’s awareness and lack of intervention instead suggest a tacit approval, aligning more closely with implied authority.