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 Nebraska, liability in the context of personal injury is established when an individual or entity (the defendant) fails to meet a legally recognized duty of care towards another (the plaintiff), resulting in harm or damages. This duty of care is an obligation to act with the caution and prudence that a reasonable person would under similar circumstances. If the defendant breaches this duty and causes injury or loss, they can be held legally responsible, or liable, for the resulting damages. Liability insurance is a common way for individuals and businesses to protect themselves financially from claims where they may be found liable. This insurance covers legal costs and payouts up to the policy limits. When an insured party faces a claim, they can file a liability claim with their insurer, requesting defense and indemnification against third-party claims. Additionally, in a business context, liabilities refer to financial obligations or debts of a company that are recorded on its balance sheet, representing claims by others against the company's assets.