Vicarious Liability and What it Means as a Small Business Owner
As a small business owner, you already have enough on your plate trying to run a successful business, and ensuring you are in compliance with all laws, including employment and labor laws. If your business employs workers, something else you need to be keenly aware of is vicarious liability and the theory of respondeat superior.
What is Vicarious Liability?
In essence, vicarious liability is when one person is held responsible for the acts of or omissions of someone else. As it relates to employer and employee relationships, the employer can be held legally liable for the actions or omissions of its workers, provided the other side can show the act in question took place while in the “course and scope” of their employment duties.
The legal theory of respondeat superior is based on a Latin phrase that translates to “let the master answer.” It is a very old aspect of the law that transfers vicarious liability to someone who had control or the duty to control the actions of someone else. In the case of employer and employee relationships, the employer can be held liable if it had the right and duty to control the individual who caused damages and injuries to someone else.
Examples of Employer Liability
If you have employees who drive your vehicles, make deliveries, or run any sort of errand that is part of their job, you may be liable for any accidents they get into. If they deviated from what they were supposed to be doing and made a side trip for something completely unrelated to work, and you had no knowledge, then you may not be liable for their actions.
Another situation could be a salesperson who works for you. If that person does door to door sales as a representative of your company and subsequently runs off with a customer’s money after making a sale on your behalf, you may be liable. There are even instances where independent contractors may be viewed as a direct employee under the theory of vicarious liability.
In partnership agreements, a partner may be held vicariously liable for any negligent acts by another partner, and there are scenarios with corporations as well. The corporation’s directors and officers are performing duties on behalf of the company, therefore some situations may lead to an allegation of vicarious liability.
Retaining a Small Business Attorney
Depending on the type of small business you have, there may be coverage under a general liability policy for some of the aforementioned examples. It’s important that when you are setting up your company you seek assistance from a skilled Washington DC small business lawyer. Our skilled team can assist with all facets of business litigation, both plaintiff and defense. In the event you find yourself facing a lawsuit that alleges wrongdoing by your employees or business partners, it’s imperative you contact a good defense lawyer immediately. The attorneys at the office of Tobin, O’Connor & Ewing have years of experience in setting up businesses, ensuring labor compliance, and settling business disputes, including partnership and shareholder disputes. Please contact us at 202-362-5900 today for a confidential consultation.