liability
lye-uh-BIL-uh-tee
/ˌlaɪ.əˈbɪl.ə.ti/
Legal responsibility for one's actions or omissions; financial debts and obligations owed by a business.
Refers either to legal fault and exposure or to balance-sheet financial debts.
The story behind the word. Traced to Anglo-French 'liable', from Latin 'ligare', meaning 'to bind'. Being liable means you are tied or bound by legal force to answer for debt or harm.
Word relationships
- obligation: Obligation is a general duty, whereas liability specifically highlights enforceable debt or legal accountability.
- asset: An asset is a valuable resource owned, whereas a liability is a financial debt owed.
Commonly confused with
- debt: Debt is specifically borrowed money, while liability includes all legal financial obligations and operational duties.
Word family
- liable (adjective): Legally responsible.
Collocations
- limited liability
- legal liability
- liabilities and assets
Idioms & expressions
- a liability to someone
Example sentences
- "The manufacturer assumed full liability for any physical injury resulting from defective factory equipment." Legal contract
- "The balance sheet showed that short-term liabilities exceeded available liquid assets." Corporate accounting
Memory hook
LIA-bility means you are LIGAted (bound) to pay. Bound by legal obligation.
When not to use
Do not confuse with general weakness unless speaking figuratively about a disadvantage.
Fun facts
- The corporate structure called 'Limited Liability Company' (LLC) was created to protect personal assets from business debt.
Related words
Explore more words
debt, accountability, obligation, accountable, insolvent, culpability
Also appears in
- Leadership → Responsibility & Accountability
- Business → Workplace Hazards & Safety
- Finance → Taxation & Revenue
- Finance → Debt, Loans & Bankruptcy
- Finance → Auditing & Accounting
- Law → Contracts & Agreements
- Law → Civil Law & Disputes
- Law → Negligence & Liability
- Finance → Auto & Home Insurance
- Civic Life & Public Services → Personal Tax Filing & Returns
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