What Is Vicarious Liability? Example and How To Avoid It

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What Is Vicarious Liability?

Vicarious liability is liability that arises when an individual or entity is held partially responsible for the unlawful actions of another party, even though the latter carried out the actions alone.

Vicarious liability can arise in situations where one party is responsible for, and has control over, someone such as an employee, and is deemed negligent in carrying out their responsibility and exercising their control.

For example, in a company, a supervisor could bear responsibility for the actions of a subordinate or associate, based on their employment relationship.

Key Takeaways

• Vicarious liability is when a supervisory party is liable for the negligent actions of a third party for whom they are responsible.
• Employers have a strong chance of avoiding vicarious liability by proactively exercising reasonable care to prevent employees' negligent behavior.
• Parents can be held vicariously liable for the negligent or criminal actions of their children.

How Vicarious Liability Works

Vicarious liability, or imputed liability, is indirect liability for the actions of a another person, such as a subordinate or child. An employer can be held liable for the unlawful action of an employee. This action might be harassment or discrimination in the workplace.

An employer might also be held liable if an employee operates equipment or machinery in a negligent or inappropriate way that results in damages to property or personal injury to an individual.

For example, if a construction worker mishandles the controls of a crane and topples the wall of a nearby building, the company overseeing the construction and worker may face vicarious liability for damages caused. Likewise, if an engineer loses control of a train, and it proceeds down the tracks on its own, then the company that owns and operates the train may face vicarious liability for any resulting damages and injury .

The employer is held liable because it is considered:

• Responsible for its employees’ actions while they are on the job
• Able to prevent and/or limit any harmful acts performed by its employees

An employer may be able to avoid vicarious liability by exercising reasonable care to prevent unlawful behavior.

Example of Vicarious Liability

In the case of the 1989 Exxon Valdez oil spill, Exxon Shipping Co. faced vicarious liability for the series of events that led to 10.8 million gallons of crude oil spilling into the sea off Alaska and affecting the shore and animal life.

Among other factors, the company was held accountable for lack of supervision of the captain, fatigue among crew members aboard the oil tanker, and the condition of radar equipment that might have helped prevent the ship from running aground.

Due to the multiple appeals, a changing award amount, and the gray area of maritime law pertaining to a ship owner being responsible for the actions of an employee, this is a fairly complicated example of vicarious liability.

How To Avoid Vicarious Liability

• Actively monitor your workplace, respond to complaints from employees and other parties such as vendors and suppliers, and provide a clear method for registering complaints. Document these actions in detail.
• Create employee manuals with thorough explanations of rules and expected employee conduct. Ensure that new employees read, understand, and accept them. For existing employees, institute a program of periodic review of such company regulations and such expectations of behavior.
• Provide training programs to employees that detail safety protocols and proper conduct for job positions.
• Engage a lawyer to review your business or affairs and to discuss the potential for and ramifications of vicarious liability. Request recommendations for methods of protection.
• If there's potential for vicarious liability, investigate business insurance such as general liability insurance. General liability insurance offers protection in case of alleged third-party property damage or personal and advertising injuries caused by you or an employee. There's also errors and omissions insurance that protects you from mistakes made and the failure to provide services.
• Purchase and maintain the appropriate insurance coverage.

Special Considerations

Another common source of vicarious liability occurs when a child behaves negligently. The parent can sometimes be held vicariously liable for the child’s actions. One situation in which this might occur is if a child injures or kills someone while driving. The parents can bear responsibility for allowing the child to have access to the vehicle.

Is Malicious Intent Required for Vicarious Liability?

Malicious intent is not necessary for vicarious liability. An accidental incident can result in vicarious liability.

How Can Vicarious Liability Lawsuits Be Avoided?

There are several types of business insurance available that aim to protect business owners from vicarious liability lawsuits. These include general liability, errors and omissions, and umbrella insurance. Umbrella insurance covers anything that falls outside the purview of general liability insurance.

What Are Some Other Examples of Vicarious Liability?

There are many different circumstances inn which you may be held vicariously liable. If you loan your car to someone and they cause a traffic accident, you could be held vicariously liable. There have also been cases of vicarious liability where police departments were held liable when duty weapons had been used in crimes after weapons were left unsecured during off-duty periods.

The Bottom Line

Vicarious liability can occur in a number of situations when one person is held legally responsible for the actions of another person. such as when an employer is responsible for an employee's misconduct.

If you face a situation where you may be held vicariously liable, consider consulting an attorney for legal guidance.

1. Tanya P. De Sousa. "Oil Over Troubled Waters: Exxon Shipping Co. v. Baker and the Supreme Court's Determination of Punitive Damages in Maritime Law." 20 Vill. Envtl. L.J. 247 (2009). Page 249.
2. Exxon Valdez Oil Spill Trustee Council. “Details About the Accident.”
3. Oyez. “Exxon Shipping Co. v. Baker.”
4. U.S. Equal Employment Opportunity Commission. "Enforcement Guidance: Vicarious Liability for Unlawful Harassment by Supervisors."
5. California Accident Attorneys Blog. “Department Responsible for Officer’s Failure to Secure His Gun.”

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