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.

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

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.

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.