Contingent Liability
Plain English Definition: A potential financial obligation that may arise based on the outcome of a future event.
What Contingent Liability really means for someone with an insurance policy
Contingent Liability represents risks that become actual liabilities if specific events occur, often addressed through special insurance policies.
Contingent Liability Real World Examples
- A company facing a potential lawsuit after a product recall.
- A contractor liable for construction defects discovered after project completion.
- A business partner being held responsible for partnership debts.