Liability Insurance

Categories: Insurance

"Liability," as in "your fault."

You were found liable for having left the banana peel on the floor. The stooge slipped on it. He sued you. He won. Luckily, you had homeowner's insurance, which covered banana peel slippage. So you pay the $100 deductible and your liability insurance covers the next $2,900 for hospital bills incurred from said peel slippage.

Whoop whoop whoop.

Related or Semi-related Video

Finance: What is liability?3 Views

00:00

Finance allah shmoop What is a liability What is it

00:07

it's what you owe you bought four million gumballs on

00:10

credit for your party pack for the parade the money

00:13

is owed to gumballs are us in ninety days that's

00:18

a short term liability Alright next example you borrowed eighty

00:22

three million dollars to set up your new do dental

00:24

drive through service and that money is due in twelve

00:28

years at seven percent interest a year that's A long

00:31

term liability Why long term Because it comes due in

00:35

over a year and that's basically it liability comes in

00:39

two flavors short and long term and it's one of

00:41

the key elements of the balance sheet as it lives

00:43

in this space ride over here So yeah that's a

00:47

liability all this crap time now considering how many gumballs

00:51

you've consumed in the past month you really should get

00:53

yourself to a good drive through dentist or maybe sleep 00:00:56.998 --> [endTime] in mr

Find other enlightening terms in Shmoop Finance Genius Bar(f)