According to the law of agency, who is considered the principal?

In the context of the law of agency, the principal is the party that authorizes the agent to act on their behalf. In the case of insurance, the insurer is the organization or entity providing coverage and is thus the principal in the agency relationship. The insurer delegates authority to the insurance agent to perform specific duties, such as selling policies, providing information, and handling claims on behalf of the insurer. This relationship is foundational in understanding how agents operate and the responsibilities they bear towards both the insurer and the insured.

While the insurance policyholder may engage with the agent, they do not have the capacity of principal in this context. Instead, they are often referred to as the client or insured individual. The agent, while acting for the insurer, does not have the principal status themselves. Therefore, the insurer's role aligns with the definition of a principal within the law of agency.