Final answer:
Vicarious liability is when one person is held responsible for the torts committed by another, due to their legal relationship. Limited liability refers to the protection of personal assets for owners of a business entity, where their liability is limited to their investment.
Step-by-step explanation:
Vicarious liability refers to the concept in which one person (the employer or principal) is held responsible for the torts or wrongful acts committed by another person (the employee or agent). This liability arises due to the legal relationship between the employer and the employee, where the employer has the authority to direct and control the actions of the employee in the course of their employment.
An example of vicarious liability is when a delivery driver, who is an employee of a company, causes an accident while driving a company vehicle. In such a case, the injured party can hold the company legally responsible for the driver's actions.
On the other hand, limited liability refers to the concept where the owners or shareholders of a business entity (such as a corporation or limited liability partnership) are not personally liable for the debts and obligations of the company. Their liability is limited to their investment in the company, and their personal assets are protected from being used to satisfy the company's obligations.