Last edited 18 Jan 2017

Liability

In its broadest sense, the word 'liability' refers to a responsibility placed on someone, or something that places them at a disadvantage.

Liability has a number of more specific meanings, depending on the context in which it is used:

  • A legal liability is a legally-bound obligation to pay debts or fulfill other obligations.
  • A public liability is part of the law of tort which focuses on civil wrongs. See Tort and Public liability insurance for more information.
  • Financial liability refers to the financial responsibilities one entity has to another, such as; borrowing to improving a business, or a transaction or other event that has already occurred but has not been paid for. Financial liabilities might be current (i.e. wages, taxes, accounts payable and so on), or long-term (i.e. long-term bonds, long-term leases, pension obligations and so on).

More detailed examples include: