What is "vicarious liability"?

Vicarious liability refers to a legal principle where a principal, such as an employer or business owner, is held responsible for the negligent actions or omissions of their agent, such as an employee or contractor, that occur within the scope of the agent's duties. This concept is rooted in the idea that the principal has a degree of control over the agent's actions and therefore shares the liability for any harm that the agent may cause while performing tasks on behalf of the principal.

In this context, if an agent's actions lead to injury or damage during their work for the principal, the principal can be held liable even if they themselves did not directly commit any misconduct. This orientation encourages principals to exercise reasonable care in selecting agents and overseeing their activities, ultimately promoting accountability and safety in business operations.

Understanding vicarious liability is essential for grasping how the agency relationship functions and highlights the significant responsibilities that principals have regarding their agents.