When it comes to insurance, negligence refers to unreasonable or reckless behavior that results in a loss. It can apply to business, home, auto or health insurance. The term seems straightforward — but did you know that there are four types of negligence (gross, comparative, contributory and professional)? Read on to understand the types of negligence, how they impact your business, and how insurance can protect you.

What is negligence?

Negligence refers to unreasonable or reckless behavior that is out of line with how a reasonable person would act in a given set of circumstances. For example, if an item in your place of business caught fire, a reasonable person would grab the fire extinguisher and attempt to put it out. If you stood there without trying to stop it and then proceeded to let the rest of the equipment catch fire without ever calling 911, your insurance company may claim that you were negligent and decide not to provide financial compensation. However, if there was no way to fight the fire safely or if it spread rapidly beyond your control, this wouldn’t be negligence since there were no reasonable measures to put out the fire available to you.

Negligence pertains to several different types of insurance, including:

  • Business
  • Home
  • Auto
  • Health

Types of negligence

There are several different types of negligence, including gross negligence, comparative negligence, contributory negligence and professional negligence. It’s essential to understand the difference between them so you can adequately protect your business.

Gross negligence

Gross negligence occurs when the failure to act is so careless or intentional that it demonstrates a complete and total lack of safety concern. Legally, this is much more serious and can result in jail time if found guilty. Examples would include a doctor performing the wrong procedure or a caregiver not giving an elderly person food or water for several days.

Comparative negligence

Comparative negligence occurs when two parties are at fault and have partially contributed to their damages and injuries. As a result, the damages are split between the two according to their responsibility for the injury or damage.

For example, imagine a situation where you’re driving your company car at night and hit a pedestrian. You had a green light, and the pedestrian had a “don’t walk” signal, but little did you know that you also had one headlight out. Thus, while the pedestrian shouldn’t have been jaywalking, you had less-than-ideal visibility. In this case, your commercial auto insurance carrier may decide that the two parties share fault.

Contributory negligence

Contributory negligence occurs when the plaintiff contributed to their own damages or injury. For example, imagine that a business owner is speeding in the company car at night to finish errands. They nick another car whose driver has a high blood alcohol volume. The injured driver may be unable to collect compensation for their injury or vehicle damages because they were driving drunk. Most states have abolished contributory negligence, opting for comparative negligence instead.

Professional negligence

Professional negligence is explicitly tied to a business relationship. Typically, it involves a customer that depends upon the professional to lend them their advice, expertise or skills to complete a task. However, the professional fails to provide their services appropriately, causing financial loss or reputational damage to their client.

Don’t be negligent about risk

Fair or not, a negligence lawsuit can lead to significant expenses. Businesses should have professional liability insurance with general liability insurance to safeguard against the financial impacts of a negligence claim.

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