Registered Insurance Brokers of Ontario (RIBO) Practice Exam

Negligence is accurately defined as the failure to exercise reasonable care. This concept revolves around the idea that individuals and organizations have a duty to act with a certain level of care to avoid causing harm to others. When someone does not meet this standard of care, which can be dictated by societal norms, regulations, or industry practices, they may be deemed negligent if their actions lead to harm.

In the context of insurance, understanding negligence is crucial because it often plays a significant role in liability claims. If an insurance broker or service provider fails to act reasonably and this leads to a loss for a client, the broker could be held liable for negligence.

The other options, while related to various legal and professional principles, do not capture the essence of negligence directly. The failure to meet industry standards could be a contributing factor to a case of negligence, but it is too narrow and does not encompass the broader definition. A breach of a contract pertains specifically to failing to fulfill contractual obligations, which is distinct from negligence. Lastly, the act of fraud involves intentional deceit, which is fundamentally different from negligence that involves a lack of reasonable care rather than intent to mislead.