Casualty and liability
Negligence
Negligence is the failure to exercise reasonable care, established by proving a duty, a breach of that duty, causation, and damages.
Reviewed September 2026 · Exam outline effective September 1, 2026
In plain English
Liability analysis begins with the four elements. A duty of care has to exist, the defendant has to have fallen short of it, that shortfall has to have caused the harm, and there has to be actual damage.
All four are required. A frightening near miss with no injury fails on damages. A genuine injury with no duty owed by the defendant fails at the first element. Missing one element ends the negligence analysis.
Why the exam tests it
Negligence is the analytical backbone of the casualty portion of the outline, and liability questions are frequently resolved by identifying which element is missing.
The trap
Confusing liability with coverage. Establishing negligence says the insured may owe damages; it does not establish that the policy covers those damages. Those are two separate analyses.
Worked example
A customer slips on a spill that staff had been told about an hour earlier and breaks a wrist. Duty, breach, causation, and damages are all present, so the liability analysis is satisfied — and the coverage analysis then begins separately.
Full course
Study this with the complete Texas All-Lines course
This concept is covered in depth in the "Duty, Breach, Causation & Damages" lesson, alongside every other topic on the content outline.
Related terms
- Bodily injuryBodily injury is physical harm to a person, including sickness or disease and, where the policy so provides, death resulting from that harm.
- Property damageProperty damage in liability terms is physical injury to tangible property, including resulting loss of use, for which the insured may be legally responsible.
- OccurrenceAn occurrence is an accident, including continuous or repeated exposure to substantially the same harmful conditions, that triggers liability coverage.
- Third-party claimA third-party claim is a claim brought against the insured by someone else, where the policy responds to the insured’s legal liability for that person’s injury or damage.
Compared side by side
- First-Party vs. Third-Party ClaimsFirst-party and third-party describe who is making the claim relative to the insurance contract. The distinction changes the duties owed, the coverage analyzed, and the shape of the investigation.
- Negligence vs. Strict LiabilityMost liability claims turn on fault, but not all of them. Negligence and strict liability represent two different theories of responsibility, and the difference determines what a claimant must prove.
- Workers' Compensation vs. LiabilityWorkplace injuries are handled through a system that works differently from ordinary liability claims. Recognizing which framework applies is essential on the casualty portion of the exam.
Exam topics using this term
- Negligence elements and liability analysis on the Texas All-Lines examThe four elements of negligence, why the exam builds fact patterns where exactly one fails, and how to test each element in order.
- Personal liability coverage on the Texas All-Lines examHow the liability section of a homeowners policy responds to third-party claims, and how medical payments to others differs from liability.
- Workers compensation fundamentals on the Texas All-Lines examWhy the no-fault structure replaces negligence analysis, and how the arising out of and in the course of employment test drives compensability.
Sources
- Pearson VUE — Texas Department of Insurance licensing exams
Scheduling, candidate handbook, content outlines, test-center rules, and application timing. Reviewed 2026-07-21.
Requirements, fees, forms, exam details, and deadlines can change. Verify the current rule with the linked authority before scheduling, applying, renewing, or handling a real claim.
For exams on or after September 1, 2026. If your exam is scheduled earlier, use the outline that applies to your exam date. Texas Exam Academy is independent exam preparation and is not affiliated with or approved by the Texas Department of Insurance or Pearson VUE. Verify current eligibility, fees, forms, and requirements with the responsible authority.