Apparent Authority

This is the suggested or implied authority granted to an agent even if this implication was not the intention of the principal. An example is when an employee signs a contract on behalf of his company. This employee does not actually have full authority to do so. If a reasonable person would believe that this employee had the authority then the contract would be binding.

Be very careful in your procedures that the lines of authority are clear. This is part of your risk management and could lead to dire financial consequences if not considered carefully.

Do not make assumptions - ask questions and be sure that all your mid-level managers are aware of the scope and limitations of their roles.

You can seek the professional advice of a risk manager and work with your insurance agent or broker to help limit losses. Take control of your insurance.