limited liability

(redirected from Limit of Liability)
Also found in: Dictionary, Thesaurus, Financial, Acronyms, Wikipedia.

limited liability

n. the maximum amount a person participating in a business can lose or be charged in case of claims against the company or its bankruptcy. A stockholder in a corporation can only lose his/her investment, and a limited partner can only lose his/her investment, but a general partner can be responsible for all the debts of the partnership. Parties to a contract can limit the amount each might owe the other, but cannot contract away the rights of a third party to make a claim. (See: corporation, shareholder, limited partnership, partnership, liquidated damages)

References in periodicals archive ?
Under the Oil Pollution Act of 1990, the limit of liability for deepwater ports is $350 million.
Once the underlying limit of liability is fully impaired and unable to provide complete protection to the individuals in the event of a non-indemnifiable claim, this coverage serves as the last line of defense and indemnity," said Rob Schueler, Vice President of St.
For mutual-fund independent directors, Kemper Vestis offers excess coverage with a separate limit of liability designated exclusively for claims against the independent directors.
The limit of liability for damage to the Garcon Point Bridges is $100 million per occurrence.
Each of these three types of coverage also has a defined limit of liability for the reinsurance carrier.
This limit of liability may be vital to directors and officers as it maintains their level of protection and is not diluted or shared with the corporation.