liability
ly-uh-BIL-ih-tee
/ˌlaɪ.əˈbɪl.ə.ti/
The state of being legally responsible for something.
In business, it can refer to legal responsibility or a person/thing that causes problems (a 'hindrance').
The story behind the word. Derived from the Latin 'ligare', meaning 'to bind'. To have a liability is to be 'bound' by the law to fulfill an obligation or pay for a mistake. It is the same root found in 'ligament' (which binds bones) and 'religion' (which binds people to a belief).
Word relationships
- accountability: Accountability is a broader moral or professional duty, while liability is specifically legal or financial.
- asset: An asset is a useful or valuable thing, whereas a liability is a debt or a disadvantage.
Commonly confused with
- debt: A debt is a specific amount of money owed; liability is the broader legal responsibility that might include debt.
Word family
- liable (adjective): Legally responsible.
Collocations
- legal liability
- limited liability
- product liability
- admit liability
Example sentences
- "The company's liability for the accident was determined in court after a lengthy investigation." Legal Proceedings
- "His lack of technical skills became a liability for the team during the software transition." Business Management
Memory hook
A 'Liability' 'Lies' on your shoulders like a 'Lien' (a legal claim). Bound by the law.
When not to use
Do not use 'liability' when you simply mean 'fault' in a casual conversation; it implies a formal or legal obligation.
Fun facts
- A 'Limited Liability Company' (LLC) protects business owners from being personally responsible for the company's debts.
Related words
Explore more words
debt, accountability, obligation, accountable, insolvent, culpability
Also appears in
- Leadership → Responsibility & Accountability
- Finance → Taxation & Revenue
- Finance → Debt, Loans & Bankruptcy
- Finance → Auditing & Accounting
- Law → Contracts & Agreements
- Law → Civil Law & Disputes
- Law → Corporate Law & Regulation
- Law → Negligence & Liability
- Finance → Auto & Home Insurance
- Civic Life & Public Services → Personal Tax Filing & Returns
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