Vicarious Agents Clause

Purpose

Where the policyholder engages third parties such as subcontractors, freelancers or temporary staff as vicarious agents to perform a contractual obligation, section 278 BGB makes it liable to its contract partner for their fault as if it were its own. The vicarious agents clause confirms that this statutory liability of the policyholder for its vicarious agents is covered under general liability insurance in the same way as liability for its own employees.

Effect and limits

The clause extends the group of persons covered beyond the policyholder’s own workforce to externally engaged vicarious agents, but does not change the remaining AHB exclusions: the note to clauses 7.6 and 7.7 expressly treats acts of agents and representatives as the policyholder’s own acts, so the care, custody and control exclusion continues to apply equally to damage a vicarious agent causes to third-party property in its custody.

Negotiation and practice

For businesses with a high proportion of subcontracted work, such as construction, IT services, logistics or facility management, it is essential that the clause expressly names freelancers and subcontractors as vicarious agents rather than being limited to the policyholder’s own employees. In combination with the subcontractors clause, it should also be clarified whether, and to what extent, the policyholder retains a right of recourse against the vicarious agent.