When insulation breaks down and leaks current to ground, this condition is best known as:

When insulation breaks down and allows current to leak to ground, this is specifically referred to as a ground fault. A ground fault occurs when there is an unintended connection between a live conductor and the ground or a grounded object, which results in current taking an alternate path to ground rather than traveling the intended route in the circuit. This situation poses significant safety hazards, as it can lead to electric shock, equipment damage, and fires.

The other terms listed refer to different electrical issues: insulation failure generally describes the breakdown of the insulating material itself without specifically implying a ground fault; grounding is the practice of connecting parts of an electrical system to the earth to prevent dangerous voltages; while an overcurrent condition refers to a situation where the current exceeds the rated capacity of the circuit or device, which is not necessarily related to the integrity of the insulation. Thus, ground fault is the precise term for the scenario described in the question.