Vicarious Liability
A concept within tort law that is of significant importance is that of vicarious liability. The concept of vicarious liability essentially means a principal may be liable for the conduct or the misconduct of his agents. That principal/agent relationship arises in the employment context between an employer and an employee. It may also arise in other contexts involving contractors. From a plaintiffs point of view the concept of vicarious liability is important because it typically is that legal concept that allows for complete recovery of damages.
For instance, if you are rear-ended by a truck driven by an employee of the ABC Company, your attorney in filing a suit would file the claim against not only the driver but also the employer. If suit was filed only against the driver and it turns out that there was no insurance covering that vehicle, then whatever judgment you got against the driver may be uncollectible simply because the driver may not have the financial resources to pay the judgment. If, however, you get the judgment also against the employer, then that employer probably would have the financial resources either in the form of insurance coverage or otherwise to satisfy the judgment.
The employer in that case is liable for the conduct of the employee assuming that the employee was acting within the scope of his employment. If, on the other hand, the employee was off on a personal mission on his own while operating a company vehicle and the employer had no knowledge of that and had not consented to it, then there may not be any vicarious liability in that sense because the employee was off acting on his own and was not doing anything on behalf of the employer at the time of the collision.That may also have an impact on the availability of insurance coverage.
The concept of vicarious liability has been the subject of a good deal of litigation over the years. For instance, suppose an insurance salesman comes into your home to sell you insurance on behalf of the XYZ Company and he presents to you his business card along with all the brochures of the XYZ Company and convinces you that based upon the extensive advertising of that Company and because of the well recognized name that this is a very reputable company to deal with.Based upon that you purchase a policy of insurance and tender a check in a substantial amount. If the salesman then absconds with the money, is the XYZ Company liable for your loss?
They probably are even though that salesman may not be a direct employee of the company. The salesman in that instance may be an independent contractor but the XYZ Company is still probably going to be liable because they are the ones who gave that salesman all the trappings of authenticity, gave him the opportunity to engage in his fraudulent behavior and essentially set the whole process in motion through the use of its company name and company advertising.
