How is 'negligence' defined in the context of liability insurance?

In the context of liability insurance, negligence is defined as the failure to exercise reasonable care resulting in injury or damage to another party. This concept is fundamental to liability insurance because it outlines the circumstances under which an insured party may be held responsible for compensating another party for harm caused. When an individual or entity does not act with the level of care that a reasonably careful person would in similar circumstances and this lack of care leads to someone else's injury or damage, it constitutes negligence.

For instance, in a car accident scenario, if a driver does not obey traffic signals and causes an accident, that driver's actions can be classified as negligent because they failed to uphold the expected standard of care on the road. Liability insurance typically covers damages resulting from such negligent actions, therefore protecting the insured from financial loss associated with claims of negligence.

The other options pertain to different legal or insurance concepts but do not accurately describe negligence. Intentional acts, breaches of contract, and the process of filing lawsuits represent different areas of law and liability that do not involve the failure to meet a standard of care, which is the core of understanding negligence in liability insurance.