A liability is an actual or potential financial obligation. It’s an amount owed to a person or organization for borrowed funds. Loans, notes, bonds, and mortgages are forms of debt. These different forms all call for borrowers to pay back the amount they owe, typically with interest, by a specific date, which is set forth in the repayment terms.
In insurance, liability is the responsibility to another for one´s negligence that results in injury or damage.