Who is a person who acts on behalf of and represents the interests of their employer (the principal)?

• A. Customer
• B. Agent
• C. Broker
• D. Subagent

Answer: (B)

In agency relationships, the person who acts on behalf of and represents the employer’s interests is the agent. The principal, such as an insurance company, hires the agent to perform tasks like selling policies and handling related duties within the agent’s authority. Because the agent represents the principal, they owe duties to the principal and can bind the principal to contracts within that authority.

In the insurance context, this means the agent represents the insurer (the principal) and conducts transactions on the insurer’s behalf. A broker, by contrast, represents the interests of the client or insured, helping them obtain coverage. A subagent works under the agent and acts on behalf of the agent, while a customer is a person seeking insurance who doesn’t serve as the insurer’s representative.