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Definition: Anything for which a company is legally bound or obligated, as to make good any loss or damage that occurs in a transaction

More than 80 million lawsuits are filed in U.S. courts annually. That doesn't mean your business will be the target of one, but it does suggest the need to evaluate your business's legal liability.

As your business grows, you should occasionally reassess your exposure to liability claims. Growing companies naturally become more exposed to various kinds of risks. For instance, liability claims resulting from employment, such as charges of discrimination or wrongful termination, tend to increase as your work force grows. Following are some of the major areas of liability exposure you should evaluate from year to year:

When it comes to liability, every company is different. For instance, a restaurant that uses hot-oil fryers may be considered a different liability risk by an insurance company than one that bakes its food in ovens. By giving your business a legal checkup, you'll decrease the chances of your particular liability proving to be a disastrous weakness.