Liability refers to financial obligations a municipality owes to others, including debts, accounts payable, employee benefits owed, and legal obligations. In accounting, liabilities appear on the balance sheet and include current liabilities (due within one year) and long-term liabilities (due beyond one year). Municipal liabilities include debenture debt, amounts owed to suppliers, accrued employee vacation pay, pension obligations, and landfill closure costs. Legal liability also refers to responsibility for damages or injuries, such as when someone is hurt on municipal property. Municipalities carry insurance and maintain reserves to manage liability risks and ensure ability to meet financial obligations.