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If your employee is involved in wrongdoing, you could be hit with vicarious liability! Here's how to reduce your risk...

by , 07 March 2013
The Pistorius family is in the headlines again. This time, however, it's not because of one of the sons, it's because of racist remarks Henke Pistorius (Oscar's father) made against the ANC to a British newspaper. The family has since distanced themselves from these remarks, but that hasn't kept them from media scrutiny. You could be at risk from something similar. After all, if an employee is caught doing something wrong, you could be held liable. How? It all comes down to something called vicarious liability - and as a business owner you're at risk...

While Oscar Pistorius fights a murder charge for fatally shooting his girlfriend Reeva Steenkamp, his father's comments that white South Africans need guns to protect themselves from crime that isn't dealt with by the government have led to claims of racism,' reports inquisitr.com.

And while government is up in arms about it, if you were Henke Pristorius' family you would be too. After all, they can be held for vicarious liability thanks to the remarks.

The same is true for you if one of your employees is involved in wrongdoing. You could be held responsible…

What is vicarious liability?

Freedictionary.com defines vicarious liability as 'a legal doctrine that assigns liability for an injury to a person who did not cause the injury but who has a particular legal relationship to the person who did act negligently.'

Legal relationships that can lead to you being held responsible for someone else's actions and behaviour and actions include the relationship between parent and child, husband and wife, and employer and employee.

According to the Labour Law for Managers, you can be held liable for many types of employee acts including fraud, insulting behaviour, defamation, damage to persons or property and sexual or racist remarks.

And while there's no fool proof way to protect yourself against the risk of vicarious liability, there are a number of actions you can take to reduce your risks, says the Labour Law for Managers.

Three ways to protect yourself from vicarious liability

1. Take out insurance against this liability.
You should include in your insurance policy cover against liability for the cost of damages resulting from all acts carried out by your employees and other parties, for instance independent contractors, under your control.

2. Sue your employee after you have paid damages to the injured party
As an employer, you can bring a civil claim against an employee after you've been found vicariously liable for the losses of a third party caused by the employee.

3. Insert clauses in your contracts of employment to protect yourself

By using these three tools, you can limit the risk of being hit with a vicarious liability claim should your employee be involved in wrongdoing.

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