Authority to bind is fundamental. The boundaries of the right to bind are spelled out in the agency contracts or agreements between some insurance companies and their agents. It could cause legal problems and, possibly, a lawsuit that is troublesome for all of the parties involved. When you are uncertain about authority to bind a company in a particular situation, check with the underwriter beforehand. An insured's understanding of the nature of the coverage being made effective is vital.
Time is of the essence also.
The best scenario is when an agent knows well in advance the date that proper evidence of insurance must be presented at a closing meeting for transfer of title to a commercial or residential building. The agent discusses with the insured the exposures involved and the coverage particulars, and secures application data for preparation of a policy. The policy and a memorandum copy is available at the closing. The accuracy of information for binding is essential. Inquiry about special possessions and including scheduled property coverage in a binder for such items would avoid a problem of this kind.