Canadian Accredited Insurance Broker (CAIB) One Practice Exam

What might limit an employer’s liability for an employee’s tort?

1. Employee's own misconduct

2. Use of personal property

3. Both A and B

4. Employee complete independence

The correct answer is: Both A and B

An employer's liability for an employee's tort can indeed be limited by several factors, including the employee's own misconduct and the use of personal property in the course of employment. When an employee engages in misconduct—such as violating company policy or acting outside the scope of their employment—this can diminish the employer's responsibility for the employee's actions. For example, if an employee is involved in an accident while recklessly ignoring safety regulations, the employer may argue that the employee's behavior was outside the bounds of what could be considered reasonable conduct in the workplace. Similarly, when an employee uses personal property rather than company property for work-related tasks, this can also limit liability. If an employee is injured or causes damage while using their own vehicle for personal errands rather than for business purposes, the employer may not be held liable. Consequently, both the employee's own misconduct and the usage of personal property create scenarios where the employer could reasonably argue a reduction in liability for torts committed. The interplay between these factors is essential in understanding the complexities of employer liability, making this comprehensive grasp of the situation necessary for accurate risk management in insurance practices.