What is the definition of negligence in the context of insurance?

Negligence in the context of insurance refers to the failure to act with the level of care that a reasonably prudent person would exercise in similar circumstances. This concept is crucial in determining liability and understanding how losses occur. When someone behaves negligently, they may cause harm or loss to another person, which often leads to insurance claims or legal actions.

The first choice captures this definition perfectly, highlighting that negligence involves a failure to act or not act reasonably. This can encompass a wide range of behaviors, from not maintaining property to not following safety protocols, which ultimately can lead to incidents requiring insurance coverage.

The other options do not fully encompass the legal definition of negligence. For example, failing to meet policy limits refers to the maximum amount an insurer will pay for a covered loss, which is related to coverage terms rather than behavior. Neglecting to inform the insurer of changes deals with the duty to disclose information but does not define negligence itself. Lastly, improper filing of claims pertains to the procedural aspects of making an insurance claim rather than the fundamental concept of negligence.