An insurance contract normally is sold by an agent who represents the principal (the insurer). An agent is someone who has the authority to act on behalf of someone else. The principal (insurer) is the party for whom action is to be taken. Thus, if Patrick has the authority to solicit, create, or terminate an insurance contract on behalf of Apex Insurance Company, he would be the agent and the Apex Insurance Company would be the principal.
Important rules of law govern the actions of agents and their relationship to insureds. They include the following:15
There is no presumption of an agency relationship.
An agent must have authority to represent the principal.
A principal is responsible for the acts ...