Key Takeaways
- Vicarious liability holds one party responsible for another's actions — employers for employees (respondeat superior), parents for children
- Strict liability applies regardless of fault for abnormally dangerous activities and defective products
- Contractual liability arises from hold harmless agreements where one party assumes another's liability
- Professional liability (E&O, malpractice) covers errors in professional services — requires claims-made coverage
- Joint and several liability means each defendant can be held responsible for the ENTIRE amount of damages
Types of Legal Liability
Beyond ordinary negligence, there are several special types of liability that affect insurance coverage.
Vicarious Liability
Definition: One party is held responsible for the actions of another.
Common Vicarious Liability Situations
Employer-Employee (Respondeat Superior)
"Let the master answer"
| Element | Requirement |
|---|---|
| Employment relationship | Employee, not independent contractor |
| Scope of employment | Acting within job duties |
| During employment | While performing work tasks |
Example: Pizza delivery driver causes accident while making deliveries → Pizza company is vicariously liable.
NOT Covered:
- Frolic and detour (personal errands)
- Criminal acts outside scope
- Independent contractor actions (usually)
Parent-Child
Parents may be liable for children's acts:
- Negligent supervision
- Entrusting dangerous items to child
- Signing for minor's driver's license
State Parental Responsibility Laws: Many states cap damages ($5,000-$25,000).
Vehicle Owner
Owner may be liable when lending vehicle:
- Negligent entrustment
- Family purpose doctrine (some states)
- Permissive use statutes
Strict Liability (Liability Without Fault)
Definition: Liability imposed regardless of fault or intent.
When Strict Liability Applies
1. Abnormally Dangerous Activities
Activities that create extreme risk even with due care:
- Blasting/explosives
- Storing hazardous materials
- Keeping wild animals
- Crop dusting
No negligence required — if harm occurs, liable regardless of precautions.
2. Product Liability
Manufacturers/sellers liable for defective products:
| Defect Type | Description | Example |
|---|---|---|
| Design defect | Inherently dangerous design | Car with faulty brake design |
| Manufacturing defect | Error in production | Contaminated food batch |
| Warning defect | Inadequate warnings/instructions | Missing safety instructions |
Who Can Be Liable:
- Manufacturer
- Distributor
- Retailer
- Anyone in distribution chain
3. Dangerous Animals
- Wild animals: Strict liability always
- Domestic animals: Strict liability if known dangerous propensity
Example: Dog with history of biting — owner strictly liable for future bites in many states.
Contractual Liability
Definition: Liability assumed under a contract, typically through a "hold harmless" agreement.
Hold Harmless Agreements
One party agrees to indemnify (hold harmless) another for certain liabilities.
Types:
| Form | Description |
|---|---|
| Broad Form | Indemnitor assumes ALL liability, including indemnitee's sole negligence |
| Intermediate Form | Indemnitor assumes liability except indemnitee's sole negligence |
| Limited Form | Indemnitor only assumes liability for own negligence |
Insurance Coverage Issues
- Standard liability policies often exclude assumed contractual liability
- Contractual liability coverage endorsement may be needed
- "Insured contract" provisions in CGL may cover some contracts
Professional Liability
Definition: Liability for errors, omissions, or negligence in providing professional services.
Common Professional Liability Types
| Policy Type | Who Needs It |
|---|---|
| Errors & Omissions (E&O) | Insurance agents, consultants, real estate agents |
| Medical Malpractice | Doctors, nurses, hospitals |
| Legal Malpractice | Attorneys |
| D&O (Directors & Officers) | Corporate executives |
| Accountant Liability | CPAs, auditors |
Key Characteristics
| Feature | Professional Liability |
|---|---|
| Coverage trigger | Usually claims-made |
| Standard of care | Professional standard |
| Exclusions | Intentional acts, criminal behavior |
| Tail coverage | Extended reporting period needed |
Joint and Several Liability
Definition: Each defendant can be held responsible for the entire amount of damages, regardless of their percentage of fault.
How It Works
Example: Three defendants found liable. Damages: $300,000.
- Defendant A: 60% at fault
- Defendant B: 30% at fault
- Defendant C: 10% at fault (judgment-proof)
Under Joint and Several:
- Plaintiff can collect $300,000 from A OR B
- A or B may seek contribution from others
- If C can't pay, A and B split C's share
State Variations
Many states have reformed joint and several liability:
- Pure joint and several (traditional)
- Modified (only applies to certain damages)
- Abolished (each pays only their share)
Imputed Negligence
Definition: Negligence attributed to a person who didn't act negligently.
| Relationship | Imputation Rule |
|---|---|
| Employer-Employee | Master responsible for servant |
| Driver-Passenger | Generally NOT imputed |
| Vehicle Owner-Driver | May be imputed (permissive use) |
| Parent-Child | Limited imputation |
Under the doctrine of respondeat superior, an employer is vicariously liable for an employee's actions when the employee is:
Strict liability applies to which of the following?
Under joint and several liability, a plaintiff can collect the ENTIRE judgment from:
6.4 Personal Umbrella Policies
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