Binding Authority

If an agent has ‘binding authority’, it means that an insurance company has given that agent the authority to commit that insurance company to a new insurance policy without having to obtain prior underwriting approval from the insurance company.

In Lloyd’s market, Lloyd’s coverholders receive binding authority from a managing agent on behalf of a Lloyd’s syndicate. This authorizes them to quote and bind policies on behalf of the managing agent’s syndicate, subject to certain terms and conditions.

See: bind, binder, coverholder, delegated authority.