Many HR leaders and CEOs assume that if policies are in place and procedures are followed, the organization should be safe from legal exposure. In reality, modern liability doesn’t always work that way. Some risks follow the company, even when leaders believe they have done “everything right.”

Three ideas are especially relevant for employers today: strict liability, vicarious liability, and the broader set of liabilities that arise from everyday business decisions.

Strict liability: risk that can’t be outsourced

Strict liability is about responsibility that comes from the nature of an activity, not just from fault. In practice, this often appears around highrisk or heavily regulated operations: handling hazardous materials, operating highrisk facilities, or activities with serious environmental impact.

Even with strong SOPs, training, and audits, a serious incident can still trigger liability simply because of the underlying risk profile of the activity. For leaders, the key mindset shift is this: some risks are structurally “yours,” and cannot be pushed down the chain to contractors, vendors, or employees. They must be managed at board and executive level, not only at HSE or operations.

Vicarious liability: your people speak for you

Vicarious liability makes companies responsible for what employees do in the course of their jobs, even when leadership is unaware of the details.

Imagine this scenario:

• A candidate submits a CV claiming senior marketing experience.
• The company later discovers the CV was embellished or outright fake.
• Meanwhile, the person has been meeting clients, presenting proposals, and negotiating under the company’s name.

Internally, this is a clear integrity and HR issue. You may discipline or terminate the employee. Externally, however, clients interacted with a person endorsed by the company, using the company’s title, email, and brand. If that individual misrepresented facts, overpromised, or caused loss, the company may still be held responsible toward the client. Put simply: you can fire the person, but you can’t always fire the liability.

Other liabilities leaders shouldn’t ignore

Beyond these two concepts, employers face additional exposure:

• Safety and health obligations, where regulators and courts increasingly expect proactive prevention, not reactive explanation.
• Social security and insurance obligations, where noncompliance can create both legal and financial risk when incidents occur.
• Contractual and reputational liability, where informal promises made by employees can bind or damage the company.

For HR and CEOs, the practical response is clear:

• Treat highrisk operations as if liability is inevitable unless proven otherwise.
• Tighten hiring and background checks to reduce fakeCV and misrepresentation risks.
• Clarify who may commit the company externally, and under what limits and approvals.
• Align HR policies, training, and culture with the reality that what employees do, the company often owns.

Liability today is not just a legal topic, it is a leadership topic.