Define 'negligence' in insurance terms.

In the context of insurance, negligence refers to the failure to exercise reasonable care, which can lead to harm or injury to another party. This concept is rooted in the legal liability framework, where individuals or entities are expected to act with a standard of care that a reasonable person would maintain in similar circumstances. If someone fails to act accordingly, resulting in damage or injury, they may be considered negligent.

For example, a driver who disregards traffic signals and causes an accident could be found negligent because they did not take the necessary precautions to prevent harm. In insurance, establishing negligence is crucial, as it can determine liability and the likelihood of an insurance claim being upheld.

The other options reference behaviors or situations that are not aligned with the legal definition of negligence. Intentionally causing harm describes a different legal concept, often pertaining to intentional torts, while failing to report a claim in a timely manner or exceeding policy limits addresses issues related to compliance with the insurance policy rather than negligence itself.