Liability is a legal determination or finding of fault or financial responsibility that is enforceable by law (generally the courts and legal processes)—such as when a person is found liable or is found to have liability for certain claims made or losses suffered by another person or entity.

In the personal injury context, liability usually results from a person or entity (the defendant) owing another person or entity (the plaintiff) a certain duty or standard of care, and the person or entity who owes the duty or standard of care (the defendant) breaching the duty or standard of care, resulting in damages to the other person or entity (the plaintiff).

The term liability may be used to describe:

• insurance (liability insurance) that insures the insured against certain kinds legal liability defined in the insurance policy;

• a certain kind of request made by an insured to its insurer, asking the insurer to defend and indemnify the insured against a claim by another person or entity (a third party)—often referred to as a liability claim or a third-party liability claim;

• a debt or financial responsibility of a company or business that appears on its balance sheet.

In Indiana, liability in the context of personal injury refers to the legal responsibility one party (the defendant) has for causing harm to another party (the plaintiff). This typically arises when the defendant breaches a duty of care owed to the plaintiff, resulting in injury or damages. Indiana law follows a modified comparative negligence rule, meaning that a plaintiff can recover damages only if they are less than 51% at fault for the incident. If the plaintiff is found to be 51% or more at fault, they cannot recover damages. Liability insurance is a common way for individuals and businesses to protect themselves from financial loss due to legal liability. This insurance covers legal costs and payouts for claims where the insured is found liable for third-party damages. When a liability claim is made, the insurer is requested to defend and indemnify the insured against the claim. Additionally, in the corporate context, liability refers to the financial obligations of a business, such as debts or other monetary responsibilities, which are recorded on the company's balance sheet.