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What is vicarious liability?

Vicarious liability occurs in instances where an individual is responsible for the actions of another person. This may occur when an employer takes responsibility for the actions of their employees during working hours. For example, if an employee caused an injury to a customer whilst working, the employer may be considered as being vicariously liable. In personal injury terms, this means that a claimant may claim compensation from the employer as opposed to the individual who was directly responsible for any injury or losses.

For this reason, companies take out Employer’s Liability Insurance, and this covers the cost of any compensation payments that are paid because of any accidents or injuries suffered by a claimant in the workplace. This means that if an employee of a company does an act or omission that results in damage to a third party, the company recovers the compensation costs from their insurance company, rather than sustaining the financial loss directly.

An employer may attempt to deny vicarious liability by way of minimising premium increases, inconveniences caused by legal cases and reputation damages. The situations where an employer may genuinely not be vicariously liable in a case include those where a claimant cannot prove injury or loss, where the accident was caused by someone who was not an employee or when the incident occurred outside of work hours.