When can agents be held personally liable?

Agents can be held personally liable when they breach their authority, which essentially means they act outside the limits of the power entrusted to them by their principal. An agent has a responsibility to operate within the scope of the authority given by their principal, whether that authority is express or implied. If an agent exceeds these limits or engages in unauthorized acts, they can be held liable for any resulting damages or losses because they did not act in accordance with the established guidelines.

This concept exists to protect the interests of third parties who rely on the agent's representations and actions. If an agent misrepresents their authority or acts contrary to what they are permitted to do, this can lead to legal repercussions not just for the principal, but for the agent as well. Thus, it’s crucial for agents to fully understand and adhere to their defined roles to avoid personal liability.

In contrast, agents acting within their authority or representing a competent principal typically do not incur personal liability because they are operating as intended under their business relationship. Working for a non-admitted company does not inherently lead to personal liability unless there’s a breach of authority involved.