What is Vicarious Liability?

Vicarious liability is a legal theory of liability that imputes liability from a negligent actor to another person or company for whom the negligent actor was acting on behalf of.  It is important in cases where the negligent actor does not have sufficient insurance nor assets to adequately compensate the victim of his negligence.

In some catastrophic injury claims, such as spinal injury claims, the medical bills cost millions of dollars.  Many tortfeasors (negligent drivers) do not have enough insurance coverage to satisfy such losses. Texas has one of the lowest auto insurance minimums in the country. 

Additionally, in some cases, the tortfeasor’s insurance company may deny coverage altogether. For example, if an Uber or Lyft driver causes a car crash, a personal auto insurance carrier will almost always deny coverage, unless the tortfeasor purchased a commercial rider or took other such steps.

Vicarious liability (third-party liability) could be vital in these cases. The following legal theories give victim/plaintiffs an additional source of recovery.

Third-party liability claims are very complex. The owners of semi-trucks and tour buses are often out-of-state transportation companies. And, out-of-state conglomerates often own bars and other commercial alcohol-selling entities.

Commercial Owner Liability

Drivers who rent vehicles from U-Haul, Enterprise, and other such establishments often cause car crashes. For example, many large U-Haul trucks normally require commercial drivers’ licenses to operate. Yet many outlets will rent these massive vehicles to anyone with a valid driver’s license and a credit card.

The negligent entrustment rule often applies in these situations. Owners are vicariously liable for damages if they allow incompetent drivers to use their vehicles, and that driver causes a car crash. Lack of a drivers’ license, or a safety-suspended license, usually means that the driver is incompetent as a matter of law. Circumstantial evidence, like a poor driving record or a number of “near-miss” accidents, is also admissible on this point. Having the wrong driver’s license or a restricted license will also give rise to a negligent entrustment claim.

Employer Liability

The respondeat superior doctrine usually applies in the aforementioned ridesharing crash claims. Respondeat superior simply means “let the employer answer for his servant.” This theory also applies in truck driver, bus driver, and other commercial operator claims. There are two basic prongs:

  • Employee: If the employer controls the driver in any meaningful way, the driver is an employee. That control could be the route traveled or the hours worked. So, people like independent contractors and church volunteers may be “employees” in this context.
  • Scope of Employment: Similarly, any act which benefits the employer in any way is within the scope of employment. Once upon a time, this prong only applied to situations like a delivery driver making regular delivery runs. But this rule is much broader now.

Alcohol Provider Liability

Many states have limited or eliminated their dram shop laws. But Texas has one of the broadest such laws in the country. Alcohol providers are vicariously liable for car crash damages if they sell liquor to an obviously intoxicated person who subsequently causes a car crash.

The relevant section of the Alcoholic Beverage Code has a couple of twists. Texas’ contributory negligence law may affect the alcohol provider’s liability. Furthermore, there is also a safe harbor exception embedded in the law. So, these claims are even more complex than other kinds of vicarious liability claims.

The dram shop law applies to bars, grocery stores, and other commercial providers. Noncommercial providers, such as party hosts, might be vicariously liable for car crash damages as well, under a theory like negligent undertaking.

Conclusion

In summary, the tortfeasor may not be the only party that is responsible for damages. It is important to consider other avenues of recovery, particularly in cases of catastrophic injury or limited insurance coverage. For a free consultation with an experienced personal injury attorney in Houston, contact Simmons & Fletcher, P.C.

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Author

Paul Cannon

Paul Cannon has practiced personal injury trial law since 1995. He is Board Certified in Personal Injury Trial Law (2005). He has earned recognition as a Super Lawyer by Thompson Reuters in 2017 & 2018, and as a Top 100 Trial Lawyer by the National Trial Lawyers Association in 2017. He is a Shareholder, trial lawyer and online marketing manager at Simmons and Fletcher, P.C. His legal writings have been published by the Texas Bar Journal, Business.com, Lawyer.com HG Legal Resources, Lawfirms.com, and others. He has been asked to give education talks and media interviews on dog bite law.