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Negligence is a fundamental principle of liability insurance. Many commercial liability policies cover claims by third parties for injuries resulting from negligence committed by an insured. To understand liability insurance you must first grasp the concept of negligence.

What is Negligence

The term negligence means the failure to exercise reasonable care. Negligence is a type of tort. A tort is a violation of a person's civil rights, other than a breach of contract.

Negligence is considered an unintentional tort since a person does not behave negligently on purpose. Negligence is distinguished from intentional torts like slander and false arrest. Intentional torts are deliberate acts that can cause injuries to others.

Reasonable Care

How do you know whether a person has behaved negligently? Courts generally make this determination by comparing the defendant's behavior to the actions expected of a "reasonably prudent person."

The "prudent person" is fictional. This person is used as a standard and represents a typical person in the community. If a court finds that finds that the defendant failed to act as a reasonably prudent person would have acted in the same situation, it will likely conclude that the defendant was negligent.

The degree of care a person must exercise depends on the circumstances. A surgeon performing brain surgery is expected to exercise a higher degree of care than a manager of a grocery store.

Individuals who are not professionals are generally expected to act with ordinary care.


The following example demonstrates behavior that would likely qualify as negligent. Fred owns a small grocery store called Fancy Foods. One day Susan is shopping at Fred's store when she accidentally drops a jar of pickles.

The jar breaks and brine splashes across the floor. Susan reports the incident to Fred. However, Fred does nothing. He neither cleans up the spilled pickles himself nor asks an employee to clean them up.

The broken pickle jar is still on the floor 30 minutes later when Betsy walks down the aisle. She doesn't notice the wet floor until she slips and falls on it. Betsy suffers a broken arm in the fall. She sues Fancy Foods for bodily injury, alleging that Fred was negligent.

Fred was clearly negligent. A reasonable person would have recognized that a wet floor is hazardous to customers. Had Fred acted prudently, he would cleaned up the spilled pickles promptly to protect his customers from injury. If Fred had not behaved negligently, Betsy's accident would not have occurred.

Elements of Negligence

In the previous example Betsy has sued Fred for negligence. To win damages against Fred, Betsy must prove all of the following:

  • Fred had a legal duty to Betsy to exercise care.
  • Fred failed to exercise the degree of care he owed Betsy.
  • Betsy suffered an injury such as bodily injury or property damage. In this case, Betsy suffered bodily injury.
  • There was a causal connection between Fred's negligent act and Betsy's injury. In other words, Betsy's injury occurred as a result of Fred's negligence (his failure to clean up the spilled pickles).

An Insurable Risk

Negligence is an insurable risk. Negligence committed by a business owner or employee may cause an accident in which a third party suffers bodily injury or property damage. The injured person may then sue the negligent party. If the accident arose out of the use of an auto, the claim may be covered by the business owner's commercial auto policy. If the accident did not involve the use of an auto, the claim may be covered by the business owner's general liability policy.

Negligence is also covered by errors and omissions policies. These policies cover claims arising from negligent acts committed by professionals such as lawyers and engineers.

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