B2 noun Neutral

Liability

/ˌlaɪəˈbɪləti/

The state of being legally responsible for something. In a financial context, it refers to a company's financial debts or obligations that arise during the course of business operations.

Examples

3 of 5
1

If you drive without insurance, you have a huge financial liability in case of an accident.

If you drive without insurance, you have a huge financial liability in case of an accident.

2

The contract clearly states that the firm accepts no liability for loss of data.

The contract clearly states that the firm accepts no liability for loss of data.

3

I'm worried that my old car is becoming more of a liability than an asset.

I'm worried that my old car is becoming more of a liability than an asset.

Word Family

Noun
liability
Adjective
liable
💡

Memory Tip

If you are 'Liable', you 'Lie' under the 'Ability' of the law to punish or charge you.

Quick Quiz

The chemical company denied all ______ for the spill in the river.

Correct!

The correct answer is: liability

Examples

1

If you drive without insurance, you have a huge financial liability in case of an accident.

everyday

If you drive without insurance, you have a huge financial liability in case of an accident.

2

The contract clearly states that the firm accepts no liability for loss of data.

formal

The contract clearly states that the firm accepts no liability for loss of data.

3

I'm worried that my old car is becoming more of a liability than an asset.

informal

I'm worried that my old car is becoming more of a liability than an asset.

4

Strict liability in tort law means a defendant is responsible even without intent or negligence.

academic

Strict liability in tort law means a defendant is responsible even without intent or negligence.

5

Our current liabilities have increased due to the recent purchase of new machinery on credit.

business

Our current liabilities have increased due to the recent purchase of new machinery on credit.

Word Family

Noun
liability
Adjective
liable

Common Collocations

limited liability limited liability
accept liability accept liability
financial liability financial liability
legal liability legal liability
admit liability admit liability

Common Phrases

liabilities and assets

debts and resources

product liability

responsibility for a defective product

a liability to

someone or something that causes problems

Often Confused With

Liability vs Reliability

Reliability is the quality of being trustworthy; liability is legal or financial responsibility/debt.

📝

Usage Notes

Use 'liable' (adjective) when someone is responsible, and 'liability' (noun) for the responsibility itself or the debt.

⚠️

Common Mistakes

Learners often use 'liability' only for money, but it can also mean a person who causes problems (e.g., 'He is a liability to the team').

💡

Memory Tip

If you are 'Liable', you 'Lie' under the 'Ability' of the law to punish or charge you.

📖

Word Origin

From the French 'lier' (to bind), meaning you are bound by law or debt.

Grammar Patterns

liability for [something] to be a liability to [someone]
🌍

Cultural Context

The concept of 'Limited Liability Companies' (LLCs) is a cornerstone of modern capitalism, protecting personal wealth from business debts.

Quick Quiz

The chemical company denied all ______ for the spill in the river.

Correct!

The correct answer is: liability

More business words

implement

B2

To implement means to start using a plan, system, or law to make it happen or put it into action. It involves the practical step of carrying out a strategy or policy that has been officially agreed upon.

innovation

B2

Innovation refers to the process of creating or implementing a new idea, method, or product that significantly improves an existing situation. It is commonly used in business and technology to describe breakthroughs that lead to growth or efficiency.

Revenue

B2

The total amount of income generated by the sale of goods or services related to the company's primary operations. It is often referred to as the 'top line' as it sits at the top of the income statement before any expenses are deducted.

Stakeholder

B2

A person, group, or organization that has an interest or concern in an organization. Stakeholders can affect or be affected by the organization's actions, objectives, and policies.

Asset

B2

A useful or valuable thing, person, or quality. In finance, it specifically refers to a resource with economic value that an individual or corporation owns or controls with the expectation that it will provide a future benefit.

Merger

B2

A legal consolidation of two entities into one, often to create a larger, more competitive company. Unlike an acquisition, it is usually presented as a friendly agreement between equals.

Acquisition

B2

The act of one company purchasing most or all of another company's shares to gain control of it. It can also refer to the act of gaining a new skill, habit, or item.

Dividend

B2

A sum of money paid regularly by a company to its shareholders out of its profits or reserves. It is a way for a company to share its financial success with those who invest in it.

Expenditure

B2

The action of spending funds, or the total amount of money spent by a person, company, or government. It is a more formal term than 'spending'.

Investment

B2

The act of putting money, effort, or time into something to make a profit or get an advantage. In finance, it specifically refers to purchasing assets like stocks, real estate, or bonds.

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