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Insurance · Commercial General Liability

What is 'vicarious liability'?

Reviewed by Jordan Morley, Editorial Lead at 247SimpleTests. Written by the 247SimpleTests Editorial Team from the official source material cited on every question.

Correct answer

Legal responsibility one party bears for the actions of another — for example, an employer being liable for the negligent acts of an employee committed within the scope of employment

  1. A Liability that cannot be insured
  2. B Liability for one's own direct actions only
  3. C A type of property coverage
  4. D Legal responsibility one party bears for the actions of another — for example, an employer being liable for the negligent acts of an employee committed within the scope of employment

Why this is the answer

Vicarious liability: Legal responsibility that one party bears for the wrongful actions of ANOTHER, based on their relationship.

Classic example: RESPONDEAT SUPERIOR — an EMPLOYER is liable for the negligent acts of an EMPLOYEE committed within the SCOPE OF EMPLOYMENT (e.g., a delivery driver who causes an accident while working — the employer is liable).

Other examples: A business liable for acts of its agents; parents (in some cases) for minor children; vehicle owners for permitted drivers (in some states).

Basis: The party held vicariously liable didn't commit the act directly but is responsible due to the relationship and control.

Insurance: Liability policies often cover vicarious liability exposure (e.g., employers' liability for employees' acts); SCOPE OF EMPLOYMENT is key — the employee's act must be within their job duties; vicarious liability is an important liability concept on the casualty exam — understanding that businesses/employers can be liable for others' acts (especially employees within scope) shapes liability coverage needs.

Source: Casualty Insurance — Liability, Vicarious Liability

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About this topic: Commercial General Liability

Commercial general liability questions cover bodily injury and property damage liability, personal and advertising injury, medical payments, occurrence versus claims-made forms, and the standard exclusions. This is one of 13 Casualty Insurance questions on commercial general liability, each with a full explanation on a single study page.

New to this exam? Our Insurance exam guide explains the format, scoring, and how to prepare.

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