Vicarious liability is a legal principle that makes individuals and organizations responsible for the actions of others with whom they have entrusted a duty of some type. This can be a friend, but it often involves employees, agents and volunteers of commercial enterprises.  

Black’s Law Dictionary defines vicarious liability as follows.  

“Liability that a supervisory party bears for the actionable conduct of a subordinate or associate (such as an employee) because of the relationship between the two parties. What does that mean? Let’s consider some claims examples for a clearer understanding of how vicarious liability plays out, but first, let us look at a definition of the word “vicarious.”  

According to the Merriam Webster online dictionary, “vicarious” means under definition 2., “Serving instead of someone or something else, b. that has been delegated, e.g., vicarious authority.”  

Many employees act vicariously on behalf of their employers, as often do volunteers. And this is where claims often occur.  

Examples of Claims Involving Vicarious Liability  

We’ve all (except insurance agents) lent our cars to others, right? A roommate needs to run an errand, or we may let them take our Jeep to a particularly difficult trailhead. On the way, your friend has an accident, seriously injuring several other drivers. This is a typical example of vicarious liability. Now let’s assume you know that your friend has had a problem with drinking. That detail increases your liability exposure, and something the adjuster would certainly consider as he or she investigates the claim to determine liability.  

Another example is what is also called respondent superior. Roughly translated, this means “Let the master answer.” In this claim, your insured, a general contractor, sent an employee to a job site to complete some drywall work. While completing the job, your insured’s employee drills through a water line and floods a kitchen when the home’s shutoff valve fails to operate. Damage ensues to the kitchen cabinets and flooring. Your insured, the contractor, would be vicariously liable for the actions of their employee.  

Some of our members insure public entities with police departments. Consider this example of vicarious liability in policing. Police officers have a duty to act with reasonableness when using force. However, in police liability claims, the background of that officer may become a key component of the plaintiff’s case if that officer has a history of excessive force incidents. The police department cannot say, “S/he acted of his/her own accord” because vicarious liability makes that agency responsible for the training and proper use of force and ensuring that officers use it only when it is reasonably justified.  

These are examples of vicarious liability. Not only might the driver and the employee (and certainly the officer in a use-of-force claim) be named in any litigation, but your insureds in both instances will also undoubtedly be considered the “master” as in the phrase respondent superior. 

Are there times that the insured will not be in that chain? When employees act outside the scope of their duties, for example in a criminal endeavor such as a molestation or a personal vendetta, that can limit the ability to bring in the “master,” your insured. However, the plaintiff's firm will name them initially and that decision of whether to let out your insured will be part of an often-lengthy claim process.  

Why is Vicarious Liability So Important?  

Understanding vicarious liability is vitally important because it ensures that organizations’ management teams act and make prudent decisions. This is precisely why human resources practitioners perform due diligence when hiring, to know if the person hired has any past issues that could “haunt” the organization if a claim arose.  

Similarly, if an employee has a history of acting badly toward customers when interacting with them, that employer may be found negligent if they failed to curb the behavior or terminate the employee if the behavior continues. We see many instances lately of fast food and other retail workers losing their tempers with customers, and vice versa.  

For the customer who boxes with or injures an employee, the criminal courts respond to these acts of aggression. However, when it is an employee acting aggressively, the employer may be found to have vicarious liability, even in particularly egregious cases where employees claim only to be defending themselves.  

Vicarious liability developed to hold employers and others accountable for others' actions in various circumstances. Vicarious liability serves as a deterrent for employers, and others. Carefully choosing and retaining employees, vetting volunteers, deciding whom to lend an auto to – all these decisions can create vicarious liability.  

Relationships that May Create Vicarious Liability 

There are some key relationships that may create vicarious liability.  

Employer – This is the typical respondent superior case where an employee damages property or causes bodily injury covered by the commercial general liability policy.  

Agent – principal – This example could include a child who acts on behalf of a parent.  

Partnership and joint ventures – Partners can be held personally liability for the torts of one partner when they act as a partner in that relationship.  

Independent contractors – Generally speaking, independent contractors should be responsible for their own negligence. However, as we see in claims, often there is no insurance available for the contractor, and things can get very sticky in these and other contracting issues. And subcontractors are a specific type of contractor, and these relationships can get really sicky. That is why it is imperative to occasionally remind your commercial clients of the importance of obtaining current certificates of insurance, and contractually managing the addition of additional insured status when working with contractors and subcontractors.  

Vicarious Liability is an Important Legal Concept 

In conclusion, vicarious liability is an important concept for agents and their insureds to understand. The original intent of this body of case law was to hold employers and others accountable for those they entrust to do their bidding.  

Remember this principle the next time someone asks to borrow your car.  

 Publication Date: March 8, 2024

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