What is liability?
In the general sense, liability means being responsible for something (“being liable for”). That something can be money, goods or services.
What is liability in business?
Liabilities are legal obligations that are payable to a third party and are generally referred to as accounts, which can be “current liability accounts” or “long term liability accounts.”
The main difference between the two types is that Current are due in less than one year, while Long Term are due in more than one year (such as a loan that is to be paid back).
Examples of Current Liability Accounts:
o Accounts payable–invoiced liabilities payable to suppliers
o Accrued wages–compensation earned but not yet paid to employees
o Deferred revenue–a payment by a customer that has not yet been earned by the company
What is liability in real estate?
In real estate, liability can apply to money, assets or people’s actions. Real estate liability assessment is carried out by lenders, property owners or prospective buyers, in order to determine the level of risk associated with a real estate transaction.
What is vicarious liability?
This is the responsibility of one person or entity for the actions of another. For example, a Broker is vicariously liable for his/her Agents’ actions or omissions.
What is liability insurance?
This refers to any insurance policy that protects from the risk of being held legally liable for such instances as malpractice or negligence. A liability insurance covers both legal costs and any required payouts that are deemed to be the insured entity’s responsibility. It does not normally cover intentional damage or contractual liabilities.
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