liability: the state of being liable. Legal responsiblity for an act or omission. Any legally enforceable obligation. In the context of finance, a liability is a financial obligation, e.g. loans, accounts payable, mortgages, expenses, or taxes.

“The shareholders of the company enjoy limited liability in that all they stand to lose is the amount which they have paid for their shares.”

Usage Notes and Related Terms:
Liability is on of the most important terms in law and, therefore, in Legal English.

liability insurance: insurance that covers you for money you're legally obligated to pay because a court has found that you were responsible for injuries to another person's property.

limited liability: In company law, as the company is legally distinct from its shareholders, the company is liable to pay its own debts and liabilities as they fall due; the shareholders are only liable for the amount unpaid, if any, on their shares.