An obligation that legally binds an individual or company to settle a debt.
For example, if John hits Jane's car, John is liable for the damages to Jane's vehicle because John is responsible for the damages. In the case of a company, a liability is recorded on the balance sheet and can include accounts payable, taxes, wages, accrued expenses, and deferred revenues. Talk to a Lawyer. Enter Your Zip Code to Connect with a Lawyer Serving Your Area. Premises liability is a legal concept that typically comes into play in personal injury cases where the injury was caused by some type of unsafe or defective condition on someone’s property. Most personal injury cases are based on negligence, and premises liability cases are no exception.  Definition. An obligation that legally binds an individual or company to settle a debt. When one is liable for a debt, they are responsible for paying the debt or settling a wrongful act they may have committed. In the case of a company, a liability is recorded on the balance sheet and can include accounts payable, taxes, wages, accrued expenses, and deferred revenues. DEFINITION of 'Liability'. A company's legal debts or obligations that arise during the course of business operations. Liabilities are settled over time through the transfer of economic benefits including money, goods or services. One form of liability, for example, would be the property taxes that a homeowner owes to the municipal government. Current liabilities are debts payable within one year, while long-term liabilities are debts payable over a longer period. : the state of being legally responsible for something: the state of being liable for something. : something (such as the payment of money) for which a person or business is legally responsible. : someone or something that causes problems. Full Definition of LIABILITY. 1. a: the quality or state of being liable b: probability. 2. : something for which one is liable; especially: pecuniary obligation: debt —usually used in plural. 3. : one that acts as a disadvantage: drawback. See liability defined for English-language learner Announcer (voiceover) : Liability is usually built from two components: bodily injury and property damage. Announcer (voiceover) : Bodily injury liability coverage helps protect you if you're responsible for an accident that hurts another person. Announcer (voiceover) : Bodily injury liability can help you pay for the other person's medical bills, compensation for loss of income and emergency aid at an accident scene, as well as your legal bills if that person sues you. BREAKING DOWN 'Liability'. Recorded on the balance sheet (right side), liabilities include loans, accounts payable, mortgages, deferred revenues and accrued expenses. Liabilities are a vital aspect of a company's operations because they are used to finance operations and pay for large expansions. One form of liability, for example, would be the property taxes that a homeowner owes to the municipal government. Current liabilities are debts payable within one year, while long-term liabilities are debts payable over a longer period. Liability insurance is a part of the general insurance system of risk financing to protect the purchaser (the insured) from the risks of liabilities imposed by lawsuits and similar claims. It protects the insured in the event he or she is sued for claims that come within the coverage of the insurance policy. In general, damage caused intentionally as well as contractual liability are not covered under liability insurance policies. When a claim is made, the insurance carrier has the duty (and right) to defend the insured. liability. An obligation that legally binds an individual or company to settle a debt. When one is liable for a debt, they are responsible for paying the debt or settling a wrongful act they may have committed. In the case of a company, a liability is recorded on the balance sheet and can include accounts payable, taxes, wages, accrued expenses, and deferred revenues.
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what constitutes a liability