How Vicarious Liability Could Affect Your Illinois Business

 Posted on April 18,2022 in Employment Lawyer

There is a myriad of risks that a business may face in all areas of operation, however, one area that some business owners overlook until it is too late is the risk that is posed by their employees’ actions. Under the law, this is known as “vicarious liability” and every business owner should be aware of what the potential legal and financial ramifications could be.

What Is Vicarious Liability

Per the legal doctrine of vicarious liability, a victim who sustains injury as a result of a business’s employee is entitled to receive financial compensation from the employer as long as the employee’s actions or conduct occurred within the scope of that employee’s employment.

One example of vicarious liability would be a delivery driver who runs a red light while rushing to make a delivery and crashes into another vehicle, resulting in the driver of that vehicle suffering serious injury. The business the delivery driver works for would be liable for the victim’s damages since the delivery driver was performing their work duties when they ran the light.

The question in many of these types of legal cases, however, is what constitutes that scope of employment. When answering that question, courts may also consider what the motivation was for the employee’s behavior.

Employers typically are not held liable for certain intentional acts committed by an employee, but there are exceptions. Take for example a security guard who punches a customer and breaks his nose. If the employee was partially motivated by a desire to act on behalf of the employer and partially by a desire to release his own aggression, the employer may be still be held liable for the customer’s damages.

Even if the employer has a policy in place prohibiting this type of employee behavior, that still does not guarantee that the employer would not be held liable in these types of incidents.

Avoiding Claims of Vicarious Liability

Business owners who are considering different business entities under which to structure their business should speak with a business attorney in order to find out how they can limit their personal exposure to the risk of vicarious liability by organizing their businesses appropriately. Using a corporation or a limited liability company may be a better way to limit risk than forming a business as a sole proprietor.

Contact an Illinois Business Attorney Today

If you own a business and have employees, you need to make sure that you are shielding your company as much as legally possible from the potential of lawsuit and other legal actions because of the actions of an employee. Call The Miller Law Firm, P.C. at 847-995-1205 to schedule a free consultation with one of our skilled Schaumburg, IL business lawyers.

Sources:

http://www.investopedia.com/terms/v/vicarious-liability.asp

https://www.ilga.gov/legislation/publicacts/fulltext.asp?Name=096-1257&GA=96