liability – 1. the state of being legally responsible for something 2. a handicap that holds something back; something that puts you at a disadvantage
(Pronounced lie-ah-bil-uh-tee)
To remember the definition of the word liability, use the following mnemonic:
He lied about his ability (liability) to do the job. He was legally responsible for the damage, and his handicap put him at a disadvantage.

Examples of liability in a sentence (legally responsible)
Tenants have legal liability for any damage they cause.
Don't admit liability for the accident.
The insurance company launched an investigation to determine liability.
Examples of liability in a sentence (a handicap that holds something back)
A kid like Jim would be a liability in any classroom.
Her lack of focus made her a liability to the team.
Their outdated technology was becoming a serious liability to the business.