Powers of the Agent

A general agent's powers are coextensive with those of his principal within the limit of the particular business or territory in which such general agent operates; while a special agent's powers extend to all acts necessary for the accomplishment of the particular transaction which he is engaged to perform. If acting within their apparent powers, agents make the company liable for their wrongful or fraudulent acts, omissions, and misrepresentations. Provided the policy or application contains no restrictions upon the agent's authority to waive forfeitures and even here we have noted disagreement in the court decisions the acts and knowledge of the agent in relation to anything pertaining to the application or policy are generally held by the courts to be the acts and knowledge of the company, thus stopping it from taking advantage of any forfeiture occasioned by the agent's errors or fraudulent acts.

While there is not unanimity in the decisions, the weight of authority is to the effect that, in the absence of restrictions, the company is liable not only for the acts of its agents, but also for the acts and knowledge of the sub-agents and employees to whom the agent has delegated authority. In insurance it is a common practice, and is frequently found necessary, for agents to employ others to assist them in their work, and having delegated authority to them, the Courts have regarded it as "just and reasonable that insurance companies should be held responsible not only for acts of their agents, but also for the acts of the agents employed within the scope of their agents' authority." While it may be argued that the company has not authorized its agents to delegate their authority to others, and that it would therefore be an unreasonable extension of the company's liability, it must be remembered that agents are employed by the companies in accordance with the usages and necessities of the business.