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What is 'negligence,' which underlies most liability claims?

Reviewed by Jordan Morley, Editorial Lead at 247SimpleTests. Written by the 247SimpleTests Editorial Team from the official source material cited on every question.

Correct answer

The failure to exercise the degree of care that a reasonably prudent person would exercise under similar circumstances, resulting in harm to another

  1. A A guarantee of safety
  2. B A type of insurance policy
  3. C The failure to exercise the degree of care that a reasonably prudent person would exercise under similar circumstances, resulting in harm to another
  4. D An intentional crime

Why this is the answer

Negligence is the failure to exercise the degree of care that a reasonably prudent person would use under similar circumstances, which causes harm to another person or their property. It is the legal basis for most liability claims. To establish negligence, four elements are generally required: a duty of care owed, a breach of that duty, causation (the breach caused the harm), and actual damages. Liability insurance responds to claims arising from the insured's negligence. Understanding negligence and its elements is foundational to casualty insurance, because the coverage exists to protect insureds from the financial consequences of being found negligent.
Source: NAIC Model Outline, Negligence

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About this topic: Casualty Insurance Basics

Casualty insurance basics cover the concept of legal liability, negligence and its elements, the types of damages, and how liability policies respond — including the duty to defend. This is one of 11 Casualty Insurance questions on casualty insurance basics, each with a full explanation on a single study page.

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