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 Texas, liability is a legal concept that refers to the responsibility one party (the defendant) has for causing harm or loss to another party (the plaintiff). This often arises in personal injury cases where the defendant is found to have breached a duty of care owed to the plaintiff, resulting in damages. Texas law follows the modified comparative negligence rule, which means a plaintiff can only recover damages if they are found to be less than 51% at fault for the incident. Liability insurance is a common way for individuals and businesses to protect themselves from financial loss due to legal liability. Such insurance policies cover various legal liabilities as defined within the policy terms. When an insured party faces a claim from a third party, they may file a liability claim with their insurer, seeking defense and indemnification. Additionally, in the context of business, liability refers to financial obligations or debts of a company that are recorded on its balance sheet.
