What is vicarious liability in real estate brokerage?

Vicarious liability means a broker is legally responsible for the actions of their agents performed within the scope of the agency relationship. If a sales agent makes a material misrepresentation to a buyer while acting on behalf of the brokerage, the broker can be held liable even if the broker personally did nothing wrong. This is why brokers must supervise their agents, maintain training programs, and carry errors and omissions insurance.