A liability is something you're responsible for, especially a debt you owe or an obligation you must fulfill. When a business has liabilities, it owes money to suppliers, banks, or employees. When you borrow $20 from your sister, that debt becomes your liability until you pay it back.

In everyday conversation, calling something a liability means it causes problems or holds you back rather than helping. A basketball team might have a player who's such a poor defender that he becomes a liability on the court, meaning the team performs worse when he plays. A broken leg would be a liability for a soccer player trying to make the team.

The opposite of a liability is an asset, something valuable that helps you. Think of it this way: assets add to what you have, while liabilities subtract from it. A student with strong math skills has an asset for science class, but poor time management becomes a liability during exam week.

In legal terms, liability means being legally responsible if something goes wrong. If your dog bites a neighbor, you might have liability for their medical bills. This is why adults carry liability insurance for their cars and homes: it protects them if they're held responsible for accidental damage or injuries they cause.