How is "negligence" defined in the context of commercial insurance?

Negligence, in the context of commercial insurance, is defined as the failure to take reasonable care to prevent injury or loss. This definition emphasizes that negligence involves a lack of proper action or due diligence, which can result in harm or damage to another party. In commercial insurance scenarios, this concept is crucial because it establishes the basis for liability claims. If a business fails to exercise reasonable care—such as neglecting safety standards, not maintaining equipment, or not following industry regulations—it may be held liable for resulting damages, accidents, or injuries.

This understanding of negligence aligns with how insurance policies assess risk and determine liability coverage. Insurers often evaluate whether a business acted reasonably in a given situation when processing claims. Consequently, recognizing the definition of negligence helps businesses understand their responsibilities and the importance of implementing safety measures to mitigate risks and avoid potential liabilities.