Vicarious Liability OR Imputed Liability

Vicarious Liability Insurance Vicarious liability (Imputed Liability) insurance protects you and your business from lawsuits resulting from mistakes caused by your employees, the independent contractors you have hired or agents that act on behalf of your small business. Vicarious liability in laws is based on a legal doctrine known as "respondeat superior" that is Latin for “Let the master answer.” When invoked, an employer can be held legally responsible, fully or partially, for the harmful acts of an employee or agent. For example, a company (called the principal) is in control of its employees. So, if an employee (called the agent) injures someone while on the job, vicarious liability rules could apply to hold the company accountable. Vicarious liability gives victims more potential defendants in a personal injury case. Vicarious liability is a form of strict liability, meaning liability in the absence of negligence. It exists when two parties have a special relationship based on a business or family connection. It essentially means the one party is responsible for acts of others as result of; negligence, libel, wrongful conviction and other civil wrongs (also known as torts) committed by the other party Any business that has employees, uses contractors, or even has volunteers is potentially at risk. As long as you have someone else representing you in an official capacity, you can be held liable for their purposeful actions or their omissions. There are three main elements of vicarious liability that need to be established and considered; relationships between employer v employee, tortious act of negligence committed and within the course of employment. Employers have a greater chance of avoiding vicarious liability by proactively exercising reasonable care to prevent any negligent behavior on the part of their employees. Your business can be held liable for the actions of: employees, directors and Officers, contractors, partners. Your company would not be held vicariously liable for an employee’s actions if the actions were clearly outside the employee’s professional duties and the employee was acting for his or her own benefit. Legally called a “frolic,” this situation can occur if an employee causes harm in a situation where they are not acting for your company. For example, if, during downtime on a work trip, an employee drives to another location to do some sightseeing and causes a car accident, they may be considered to be on a frolic, and your company may not be considered vicariously liable. To help protect your tech business against the risk of vicarious liability, make sure it carries the appropriate business insurance. These insurance policies can protect you and your business if you’re sued for vicarious liability. In most jurisdictions, an employer can be vicariously liable for an employee's negligence but will not be liable for intentionally wrongful or criminal acts, such as assault.