Statutory Liability

DEFINITION of 'Statutory Liability'

A legal term meaning that someone can be held responsible for a certain action or omission because of a related law that is not open to interpretation. This is a generic term that can apply to any field, not just finance, but in finance it may come up in reference to real estate transactions, stockholder obligations or the behavior of board members, to name just a few examples.

BREAKING DOWN 'Statutory Liability'

In New Zealand and Australia, businesses commonly purchase statutory-liability insurance to protect themselves from the fines, penalties and legal fees that can result from an accidental breach of law. These may include occupational health and safety laws, environmental laws and employment laws.