Vicarious liability can add new meaning to the term “specialrelationship” and cause the accused party to feel anything butspecial. These special relationships can exist between husbands andwives, and parents and children. In a business setting, vicariousliability typically occurs within the construct of anemployer-employee relationship.

The legal theory supporting vicarious liability is that theemployer is responsible for the actions of employees who arecarrying out their assigned duties—and as always, the court willnot accept ignorance as an excuse. The employer is also responsiblefor carrying out background checks. Examples include a securityguard who exerts excessive force while policing a facility, aparking attendant who injures a customer while driving at an unsafespeed and a warehouse worker who injures a fellow employee whilerecklessly using equipment on which he hasn't been properlytrained.

Vicarious liability can occur whether an employee is operating abackhoe or installing malicious computer code. The fact that it canpresent in so many different ways adds to the challenge of guardingagainst it. Vicarious liability can also arise when an employeecarries out his regular duties on behalf of his employer in anunlawful manner.

Some other examples of vicarious liability at the workplace orat a worksite:

• While on his way to meet with a client prospect, a salesrepresentative cheats a yellow traffic light and collides withanother car in an intersection. Because his employer had not beenpulling MVRs, he had not realized the sales representative had ahigh frequency of points. He also had a DWI. The employer learnedhis lesson, but it was too late to avoid charges of vicariousliability.
• Due to an increased seasonal workload, a company specializingin holiday gifts engages a temporary worker. Because the companydid not run a background check, it was unaware this worker had ahistory of identity theft. While using the company's computer, thetemporary worker steals additional identities.
• An employee of a tree removal service has a known history ofsubstance abuse. Because it is the busy fall season, he remains onthe work roster. While under the influence, he makes the wrong cutand a tree limb falls on the roof of a parked car. Meanwhile,someone had been texting while sitting in that car.

Our firm specializes in developing insuranceprograms for physical security companies. These companies areespecially vulnerable to vicarious liability when a guard is heldliable for assault or battery while carrying out his duties on thejob. This vulnerability becomes pronounced when the guard agencychooses to overlook the fact that the officer has a history ofphysical abuse. Physical security agencies are also vulnerable whena guard uses a patrol car on agency business, and the employerknows or should know that the guard intends or is likely to operatethe vehicle in a manner that creates an unreasonable risk of harm.(Hot dogs should be kept on a bun, and out of companyvehicles.)

It is important for a company to clearly define each employee'sapproved areas of responsibility to help anticipate incidents ofvicarious liability. These could include authorization to accessconfidential client information, authorization to undertake certaindangerous activities and authorization to drive a vehicle while oncompany business. A properly designed framework will ensureflexibility for employees who are getting the job done withoutoutlining parameters that are too broad.

Employers can anticipate instances of vicarious liabilitythrough rigorous thought regarding potential consequences ofcompany representatives' actions, clear communications to staff andsubcontractors regarding their scope of work, careful backgroundscreening and proper insurance coverage.