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Employers and insurers

Lister v Romford Ice and Cold Storage Co created a controversial principle at common law, that where an employer is found vicariously liable for an employee's actions, they are entitled to recover an indemnity from them, to cover such losses. The House of Lords accepted by a narrow margin that there may be an implied term in the contracts of employees, by which they must exercise reasonable care and skill in their work. Such principles has received both criticism and support, for various reasons. Advocacy of the indemnity features on rules of principal liability; the person to commit a tort and to cause damage should pay damages arising from it. Critics state that the recovery of an indemnity is contrary to equity, due to the general lack of wealth of employees and servants. The advent of widespread insurance of employers has led to the recovery of indemnities being widely abandoned. This is illustrated by the British Insurance Association entering into a gentlemen's agreement not to utilise the rule: