Vicarious Liability applies when a business is held legally responsible for an employee's negligent acts, within their normal duties — for example, an employee damages a client's property through carelessness, and the employer is held liable. Under Australian common law, confirmed by the High Court in Bird v DP (2024), vicarious liability applies only to employer-employee relationships, not independent contractors or subcontractors; that scenario is instead covered under Principal's Indemnity.

Vicarious Liability applies when a business is held legally responsible for an employee's negligent acts, within their normal duties — for example, an employee damages a client's property through carelessness, and the employer is held liable. Under Australian common law, confirmed by the High Court in Bird v DP (2024), vicarious liability applies only to employer-employee relationships, not independent contractors or subcontractors; that scenario is instead covered under Principal's Indemnity.