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20 April 2016 / Sarah Wilkinson
Issue: 7698 / Categories: Features , Insurance surgery , Insurance / reinsurance
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Insurance surgery: Working under cover

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Sarah Wilkinson examines vicarious liability

Following two recent Supreme Court decisions, employers will be advised to closely review the fine detail of their liability cover. Against the backdrop of the rulings in Cox v Ministry of Justice [2016] UKSC 10, [2016] All ER (D) 25 (Mar) and Mohamud v WM Morrison Supermarkets plc [2016] UKSC 11, [2016] All ER (D) 19 (Mar) it is essential that employers ensure vicarious liability is clearly defined and included in their policy wording to confirm that the policy covers all situations for which a business maybe be held vicariously liable.

The Supreme Court has re-examined the two-stage test for vicarious liability and has provided updated guidance on the development and application of the legal principle. While the court specifically sought not to open the floodgates, it has adopted a more liberal approach to the circumstances when an employer may be vicariously liable for the acts of an employee who has been negligent.

The boundaries have been pushed to allow the doctrine to reflect the realities and complexities

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