What Is Vicarious Liability? Example and How to Avoid It

Vicarious liability is when you are held partly responsible for the unlawful actions of a third party, although the third party also carries a share of the liability.

Vicarious liability can arise in situations where one party is responsible for (and have control over) a third party and is negligent in carrying out that responsibility and exercising their control. A supervisory party would bear responsibility for the actions of a subordinate or associate based on their 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 greater chance of avoiding vicarious liability by proactively exercising reasonable care to prevent employees' negligent behavior.
  • Parents can also be held vicariously liable for 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 actions of an employee, such as 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.

For example, if a construction worker mishandles the controls of a crane and topples the wall of a nearby building, then the company overseeing the construction will likely face vicarious liability. 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

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

Example of Vicarious Liability

In the case of the 1989 Exxon Valdez oil spill, Exxon Shipping Co. came under 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.

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.

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

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 still result in vicarious liability.

How can you protect yourself from vicarious liability lawsuits?

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

What are some other examples of vicarious liability?

There are many different circumstances where 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 actions. If you are in a position where you are being held vicariously liable, consider consulting an attorney for guidance on your particular situation.

Article Sources
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  1. Cornell University. Legal Information Institute. "Vicarious Liability."

  2. Digital Repository, Villanova University, Charles Widger School of Law. “Oil Over Troubled Waters: Exxon Shipping Co. v. Baker and the Supreme Court’s Determination of Punitive Damages in Maritime Law,” Page 249 (Page 4 of PDF).

  3. Exxon Valdez Oil Spill Trustee Council. “Details About the Accident.”

  4. Oyez. “Exxon Shipping Co. v. Baker.”

  5. California Accident Attorneys Blog. “Department Responsible for Officer’s Failure to Secure His Gun.”