Definition - What does Vicarious Liability mean?
Vicarious liability is legal principle that states that a party can be held liable for the negligent actions of another party with whom they have a special relationship, such as parent and child, employer and employee, and vehicle owner and driver. In the context of insurance, employers or other parties at risk of vicarious liability may need additional insurance protection to cover the consequences of the other party's negligent behavior.
Vicarious liability may also be known as imputed negligence.
Insuranceopedia explains Vicarious Liability
Vicarious liability can arise in cases wherein one party is considered responsible for another or if one party is considered an agent of another. An example would be a truck driver who accidentally destroys a low hanging bridge because they didn't realize the truck couldn't fit underneath. In this circumstance, the company who owns the truck could be held accountable if they were subject to vicarious liability. Without the appropriate liability insurance, the company would then have to pay out of pocket for damages.