What type of authority is a result of the actions and conduct of the insured?

The correct choice pertains to the concept of apparent authority, which arises from the actions and conduct of the insured. Apparent authority exists when a third party reasonably believes that an agent has the authority to act on behalf of the principal, based on the principal's representations or behavior. This type of authority is not explicitly granted but is inferred from the circumstances.

For instance, if an insured gives the impression that a certain person has the authority to make decisions regarding an insurance policy, and a third party relies on that impression, the insurer may be bound by the actions of that person. This protection exists to uphold the reasonable expectations of third parties in business dealings, even if the actual authority is limited or not granted through formal means.

The other types of authority differ significantly. Express authority refers to direct, explicit statements or agreements that grant authority. Implied authority is based on the necessary conduct that is needed to fulfill the granted express authority. Restricted authority implies limitations on the scope of authority granted, which is not a result of actions that would mislead third parties. Thus, the concept of apparent authority is foundational in understanding how conduct can create expectations and obligations in insurance transactions.