Texas Property and Casualty License Practice Exam 2026 - Free Practice Questions and Study Guide

In a vicarious liability claim, the fundamental principle is that one party can be held liable for the negligent actions of another party based on their relationship. This concept often applies in employer-employee situations whereby an employer can be held responsible for the actions of an employee executed within the scope of their employment.

In the case of option B, the company assumes liability for an employee's actions when those actions are related to their job duties. This is rooted in the idea that the employer benefits from the work performed by the employee and, therefore, should also bear the costs associated with any wrongful acts committed during that employment. The rationale behind vicarious liability is to ensure protection for victims by allowing them to seek damages from a more financially stable entity, which is typically a business rather than an individual employee who may lack adequate resources.

Other options, such as solely holding the direct perpetrator or the insurance provider liable without acknowledging the employer's responsibility, do not reflect the principles underlying vicarious liability. Likewise, the victim does not hold liability in such claims; rather, they are the ones seeking redress for the harm caused by the negligence of the employee.