Negligence is usually defined as the failure to act in a way, or attain a standard of care, that a hypothetical “reasonable person” would act or attain under similar circumstances. That results in some harm to another person or entity.

This “reasonable person” is not a real person. Instead, it is a theoretical one (a “legal fiction”) who has essentially the same experience and training as the insured does. The “reasonable person” analysis tries, to the extent possible, to compare “apples to apples”, and may even take into account the standard of care that prevails in the geographic area where the loss occurred or the standard acceptable within the pertinent industry or profession. Negligence can often result in an Insurance claim.

If a negligence claim arises, and if you are insured for such a loss, your insurer will investigate it at its own expense. This involves interviewing the insured and all people with knowledge about the occurrence. The insurer also gathers documents, such as files of its insured, and documents that support the damages claimed by the person alleging negligence. If the insurer concludes that the insured was negligent and that damages were sustained, it will try to settle the claim within policy limits”. If a lawsuit is filed, and if it goes to trial, the Plaintiff (the person claiming to have sustained financial damage) will have to present evidence that the Defendant (the person being sued for financial damages) did not reach the required standard of care. One of the ways that this is routinely done is by having an “expert witness” testify. That person is used to try to establish the required standard of care and to show that the Defendant did not reach it. The Defendant will usually also have an expert witness to try to show that the performance of the Defendant did meet the standard of care and was not negligent. That is why negligence lawsuits often become battles of experts. It is also why negligence lawsuits get very expensive.

In addition to proving negligence, the Plaintiff has to prove that real damages were incurred and that the damages being claimed were the “proximate consequence” of the negligent act. This means that were it not for the negligence, the damages would not have occurred–that the negligent act was the direct cause of the damages and that there were no intervening causes.

“Breach of contract”, in this context, means that a promise was made to perform a certain task or set of tasks, or to render advice or counsel, but failed to do so in some material way. The other party must be able to prove that he/she/it sustained measurable damages as a result of the breach.