Question

A+ Insurance Broker Agency is a small, family owned brokerage in town. They sell a variety of State Farm personal lines products and display State Farm signage on the exterior of their building. State Farm logos are prominent on the various marketing materials on display inside their offices. The signage and display of State Farm logos are an example of:

		Express authority
		Apparent authority
		Absolute authority
		Implied authority

Answer 1

Apparent authority

When an agent like A+ Insurance Broker agency use the logo of State Farm to sell its products, the authority is classified as apparent authority. This relationship has arouse because the agent, A+ Insurance Broker, has made it apparent to the customers that State Farm has given it an authority to sell the personal lines products. Hence Apparent authority is the correct option.

Express authority would have arouse when State Farm would have expressed that A+ Insurance Broker Agency is its authorized agent but the same is not the case here. Moreover as nothing had been ascertained in the contract agreement, it cannot be termed as Absolute authority as well. In addition, it is not an implied authority because State Farm did not give it a permission to act on its behalf towards the customers to make it legally binding upon State Farm.