Source : Webster's Revised Unabridged Dictionary (1913)

Liability \Li`a*bil"i*ty\ (l[imac]`[.a]*b[i^]l"[i^]*t[y^]), n.;
   pl. {Liabilities} (-t[i^]z).
   1. The state of being liable; as, the liability of an
      insurer; liability to accidents; liability to the law.

   2. That which one is under obligation to pay, or for which
      one is liable. Specifically, in the pl., the sum of one's
      pecuniary obligations; -- opposed to {assets}.

   {Limited liability}. See {Limited company}, under {Limited}.

Source : WordNet®

liability
     n 1: the state of being legally obliged and responsible
     2: an obligation to pay money to another party [syn: {indebtedness},
         {financial obligation}]
     3: the quality of being something that holds you back [ant: {asset}]