What is the term used when a broker or agent can accept a risk without prior approval from the insurer?

The term that describes the ability of a broker or agent to accept a risk without needing to obtain prior approval from the insurer is known as Binding Authority. This authority allows brokers or agents to make decisions regarding the underwriting of insurance policies on behalf of the insurer, thereby streamlining the process for clients seeking coverage. When a broker has binding authority, they can commit the insurer to coverage immediately, which can enhance customer service and improve efficiency in placing insurance with clients.

The other terms listed do not refer to this specific capability. Insurance Premium refers to the amount paid for an insurance policy, while Risk Assessment involves the evaluation of the risk profile to determine coverage terms. Policy Agreement is related to the contract between the insured and insurer but does not imply any decision-making authority regarding accepting risks.