This article is a companion piece to this video
In this episode of RG’s subrogation education series, On Subrogation: Parental 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:
When are parents statutorily liable for intentional acts of children?
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.
Does the state have a sponsorship statute?
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 license.
The theoretical framework behind that driver’s license sponsorship is an argument for parental liability in subrogation lawsuits. 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.
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.
Can non-parents count for negligent supervision?
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 company.
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.
Was the minor an agent of the parent?
Additionally, 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.
Parents may endorse 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.
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. In such circumstances, the parent will be highly scrutinized as well.
How homeowner insurance coverage applies to parental liability:
When analyzing a subrogated claim, one way to increase recoveries 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.
Learn About Subrogation Law with the Attorneys at Rathbone Group
As a founding partner of Rathbone Group, a national subrogation law firm, 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.