Insurance Journal  10 hrs ago  Comment 
Massachusetts federal judge Mark Mastroianni has rejected a bold attempt to pin liability on Bill Cosby over what his spokespersons told the press in reaction to women who accused the entertainer of sexual assault. Cosby is facing a defamation...
Insurance Journal  Oct 17  Comment 
Century Underwriting, the London-based specialist commercial managing general agent, has launched a new liability underwriting division and made two senior appointments to support its growth. Tony Collman has been appointed to lead the...
Insurance Journal  Oct 14  Comment 
Arkansas’ Supreme Court said that voters won’t be able to consider award limits in medical liability cases because the language outlining the plan on the November ballot doesn’t fully describe what the proposal would do. Ballots have already...
Insurance Journal  Oct 12  Comment 
Ironshore International has introduced a packaged policy to provide combined professional indemnity and general liability insurance for specialist engineers. Bermuda-headquartered Ironshore said it will underwrite coverage for professional...
Insurance Journal  Oct 10  Comment 
The medical malpractice insurance industry’s premiums remain essentially flat, having dropped only very slightly (0.1 percent) from last year across the industry, according to the 2016 Medical Liability Monitor Annual Rate Survey. For  75...
Insurance Journal  Sep 28  Comment 
A British court fined Merlin Entertainments 5 million pounds ($6.5 million) on Tuesday over a rollercoaster crash at its Alton Towers theme park in June last year that seriously injured five people. Merlin, the world’s second-biggest visitor...
Insurance Journal  Sep 26  Comment 
Ponderosa Insurance Agency has introduced a self-storage property and liability insurance available directly to U.S. self-storage operators that includes more coverage such as flood and California/Pacific Northwest earthquake. Ponderosa is a...
Insurance Journal  Sep 23  Comment 
QBE North America’s Commercial Insurance business has introduced a manufacturing E&O endorsement to its product liability product offering. The manufacturing E&O endorsement is a claims made coverage form providing broad coverage on a simple...
Insurance Journal  Sep 23  Comment 
There has been a marked increase in the number of companies purchasing environmental impairment liability (EIL) cover across Europe in recent years, mainly due to an increase in regulation and buyer awareness, according to a report published by...


A liability is an accounting term for anything of value a company or an individual owes. Liabilities can include financial liabilities usually debt or fixed goods which have yet to be delivered. Publicly-traded companies are required to list a summary of their assets and liabilities every quarter on their balance sheet, where accounting rules determine how liabilities are categorized and valued. The opposite of a liability is an asset - something of positive value, or something the company owns.

Types of Liabilities

From an accounting perspective, liabilities are divided into two broad categories:

Current Liabilities

Current liabilities are debts or obligations which are due within a year. Current liabilities are reported on the company's balance sheet and include Short-Term Debt, accrued liabilities and Accounts payable.

  • Short-term bank loans: which are a form of short-term debt that the company takes out.
  • Accounts payable: which is money owed to a company, for a good or service. This includes unpaid bills.

By the principle of prudence, current liabilities are reported in the balance sheet at their least favorable valuation.

Long-Term Liabilities

Long-term liabilities are liabilities that will not be paid off or are not due within a year. Long-term liabilities are also reported on the company's balance sheet and include items such as long-term bank loans and bonds issued by the company. They are generally subject to interest payments. Examples include: company cars, computers and investment in another company.


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