This article is a companion piece to the video below:

In this episode of RG’s subrogation education series, On SubrogationParental Liability, Rathbone Group subrogation attorney Kim Rathbone discusses how and in what ways parents can be held liable in subrogation claims where a minor has caused losses. 

8 Ways Parents Might be Held Responsible in Subrogation Claims involving Minors

In subrogation law, it is important to identify as many parties as possible that may be responsible for damages that have occurred. Minors sometimes cause damage to person or property, either intentionally or accidentally. When a minor child causes harm, looking to the parents is a natural first step to see if they are responsible for the tortious acts of their children.

But how does parental liability work in terms of insurance law and the right to recovery? Kim leads us through eight ways a carrier can pursue a parent via subrogation even though it was the child who caused the incident that led to loss:

1. Use Vicarious Liability as it Applies to Minor Tortfeasors.

Almost all states have statutes that hold parents vicariously liable for the willful or intentional acts of minor children. These laws are in place because parents are in the best position to prevent harm that may be caused by their minor children, and a subrogating company will need familiarity with them. 

However, there are limitations to these statutes. Some states enact limits based on a condition, such as the age of the child, or even a requirement that child live with the parent. Many states, like Maryland, limit damages to a dollar figure that parents can be liable for. There are a few states, such as Hawaii, where such liability is unlimited.

2. Identify State Sponsorships that may Establish Vicarious Liability for Parents.

Subrogating insurance companies should also look to sponsorship statutes, which create vicarious liability for parents. These are specific statutes that address when parents vouch for financial responsibility when co-signing for a minor child to obtain their driver’s permit. 

This is because, in the course of a permit, the minor should never operate the car without supervision. Therefore, if they cause an incident that leads to an auto subrogation lawsuit, the parent can be held liable, because they breached their duty of care by allowing the minor to operate the vehicle without proper supervision. 

The theoretical framework behind that driver’s license sponsorship is an argument for parental liability in subrogation lawsuits because it has those two all-important factors in subrogation liability: duty of care and breach of that duty, both by the parent. Many sponsorship statutes will limit the amount that the parent is liable for, but there are states where that liability is unlimited as well, like Ohio and Florida.

3. Subrogating Insurance Companies Can Look to Negligent Supervision.

If there isn’t a statute that addresses the situation at issue, or damages exceed the amount of recovery permitted under the statute, a subrogating insurance company can also look to negligent supervision as an avenue for possible recovery under common law. This arises when parents fail to exercise reasonable control over their child. 

When a parent knows that a child’s conduct poses a risk of harm to either person or property, then the failure to exercise control over that child to prevent the harm is negligence on the part of the parent. Generally, there is no cap for a parent’s negligence under common law based on a negligent supervision theory.

4. Ascertain whether Negligent Supervision by a Non-Parent Applies.

The negligent supervision doctrine potentially extends liability beyond the biological parents of a minor child. Any person who assumes responsibility for a minor child’s care can be held responsible under the negligent supervision theory of liability. Under this theory, any adult who is involved with the child and lives in the home, such as a step-parent or grandparent, can be pursued by the subrogating carrier.

Where a biological parent no longer has custody or control over the child, some states will not hold them liable for negligent supervision; but other states will still consider that parent to be liable for their minor child’s tortious acts. A thorough subrogation investigation examines the liability of any adults with legal exposure under the relevant state law.

Additionally, in some states, like Ohio, an adult sibling involved in the incident of loss may be held liable for the acts of the minor sibling if they demonstrated negligent supervision and/or endorsed the minor’s tortious behavior.

5. Subrogating Counsel Should Determine if the Minor was an Agent of the Parent.

State case law addresses special circumstances where a parent assumes responsibility for a child’s conduct, such as when a child is acting at the parent’s direction, like on an errand. In this kind of circumstance, courts may determine that a principal/agent relationship exists, thereby holding the parent liable for injury.

6. Parents May have Endorsed the Tortious Acts of a Minor.

Not every state allows this, but a parent can be held responsible for the acts of a minor if they approve of or ratify the tortious act of a minor child. If you can find evidence of the parent’s endorsement of the minor’s negligent or intentional act, the parent may be held liable for any damages.

This route to parental liability may also double back on negligent supervision if the child in question has demonstrated similar tortious behavior before and the parent(s) failed to intervene or discourage the behavior in any way. A subrogating carrier could argue repeated and willful negligence adds up to passive endorsement.

7. A Parent May have Allowed Access to a Dangerous Instrument.

Another instance when a parent can be held liable is where a parent allows a minor child access to a dangerous instrument. We have seen this repeatedly in criminal cases where a child shooter had access to firearms. The same concept applies to subrogation cases. For example, if a parent gifts a child a set of throwing knives and the child decides to use the neighbor’s fence as a backboard, the parent can be held liable for that property damage. In such circumstances, the parent will be highly scrutinized as well.

8. Find out How Homeowner’s Insurance Coverage Applies to Parental Liability in the Claim.

When analyzing a subrogated claim, one way to increase recovery is to explore is the parent’s insurance coverage through their homeowner’s policy. Often, homeowner policies cover not only the home, but also individual family members for the unintentional damage they cause. 

This coverage includes damage caused while at home, but also extends to damaged caused away from home. This does not include intentional acts, but damage resulting from negligence will be covered under these circumstances. Subrogating counsel’s investigatory phase will determine if this is a viable route to recovery.

Learn About Subrogation Law with the Attorneys at Rathbone Group

As a founding partner of Rathbone Group, Kim is dedicated to insurers’ rights to recovery as well as educating other subrogation professionals and clients on insurance law, often hosting RG’s videos and podcasts. As most subrogation processes are complicated and nuanced, education and experience is key to maximizing recovery in a cost-effective manner so the client comes out ahead.

If you are interested in discussion on this and other subrogation topics, visit Rathbone Group’s YouTube channel or check out our podcasts for our series, On Subrogation. Have another subject in insurance law you would like to see us cover? Email us at [email protected] to see your subrogation question answered on a future episode.