The state of being bound or obliged in law or justice to do, pay, or make good something; a legal responsibility

• A. Duty
• B. Accountability
• C. Liability
• D. Obligation

Answer: (C)

Liability is the legal responsibility to pay, perform, or make good something. The phrase “a legal responsibility” in the definition points directly to liability, which is used in law and insurance to describe the obligation to compensate or satisfy damages or duties arising from a legal duty or negligent act.

While duty, obligation, and accountability share related ideas, they’re broader or more about responsibility in a general sense. Duty can be a moral or legal obligation to act, obligation is a general term for something one must do, and accountability is about being answerable for actions. Liability specifically denotes the formal legal obligation to fulfill or pay for what is owed.

For instance, if someone is negligent and causes damage, they incur liability to cover those damages, which is what liability insurance is designed to protect against.