What term describes the entity that an agent represents in contractual agreements with third parties?

The term that describes the entity that an agent represents in contractual agreements with third parties is "Principal." In the context of agency relationships, the principal is the person or organization that authorizes an agent to act on their behalf. This relationship is foundational in various fields, including insurance, where agents may negotiate contracts and make decisions that legally bind the principal.

Understanding the role of the principal is crucial, as it underlines the responsibilities and powers vested in the agent. The agent must act in the best interest of the principal, ensuring that their agreements align with the principal's objectives and comply with applicable laws.

The other terms presented do not accurately capture this relationship. For instance, a "Client" is typically a party that engages or seeks services from a professional, but it does not imply the same authority or agency relationship inherent in the term "principal." "Designee" refers to someone who has been designated to take on certain responsibilities but does not encompass the broader authority of acting on behalf of another in contractual agreements. Lastly, "Insured" specifically denotes an individual or entity covered by an insurance policy, which does not directly pertain to the agency relationship described in the question.