Vicarious Liability

Dear valued customer.

The years just seem to fly by faster and faster, and with RKM going into our 36th year, we cannot thank you enough, our customers, for your continued support, trust and friendship. We do appreciate each and every one of you.

Even after 36 years, we are still surprised at some of the claims we get. We thought to share this unfortunate incident with you. The following claim now has a reserve of $1,000,000.

Claim Information:

A small Auto repair shop only has 1 to 2 employees. The Employee leaves home at 7am and is driving to work . While in route he swerves and avoids hitting another vehicle but unfortunately hits an 80+ man walking on the street which is severely injured. The Attorney for the injured party is suing the Auto repair shop for “ Vicarious Liability”.

The following is a definition of Vicarious Liability:

Vicarious  liability is a form of a strict, secondary  liability that arises under the common law doctrine of agency, respondent superior, the responsibility of the superior for the acts of their subordinate or, in a broader sense, the responsibility of any third party that had the "right, ability or duty to control" the activities of a violator

1.   What is vicarious liability and how does it affect your business?

To put it another way,   vicarious  liability means you and  your  business can be held  liable for something you didn’t actually do – specifically, for the actions or mistakes of your employees, contractors, or agents.

Basically the Attorney is going to try and prove that the employee does use his own vehicle for business functions during normal business operations and therefore, the Employer can be held liable.

To help prevent this type of lawsuit, if you have employees doing business errands for you, in their vehicle, during normal business hours (i.e. dropping of mail, etc..), be aware that this can potentially drag you into a Vicarious Liability law suit.

How to protect yourself from these types of lawsuits? Move to Switzerland or get out of business :). All joking aside, unfortunately at this time we don't have an answer on how to protect yourself from this type of lawsuit. However, if you have had experience with this and can shed some light on the subject, which could be helpful, please don’t hesitate to share your experience with us.