Until about 1980, lots of buildings were made using material that contained asbestos. Many years later, we know that was, uh...probably not the best idea.
Exposure to asbestos causes cancer. Big oof.
Unfortunately, a lot of folks didn’t start developing symptoms until years after their exposure, which made it hard to pinpoint the exact time and place they got sick. In fact, companies are still shelling out big bucks to settle asbestos-related claims today—just turn on any TV channel in the middle of a weekday and we guarantee there’ll be at least one law firm commercial urging asbestos-exposed folks to call in and get their share.
When there is a prolonged amount of time between an incident and its ill effects, as we’ve seen with asbestos exposure, it’s known as a “long-tail liability.” Long-tail liabilities can get really expensive for organizations and their insurance companies. Case in point: all those companies paying for asbestos-related medical costs forty-some-odd years later.
Of course, something doesn’t have to take years to rear its ugly head to qualify as a long-tail liability. If we’re in a car accident and think we’re fine, but then five days later we can’t move our neck, that can also be considered a long-tail liability. There’s actually no set-in-stone timeframe for what qualifies as long-tail and what qualifies as short-tail; it differs by insurance type (i.e., personal liability claims tend to have a longer long tail than property claims) as well as a number of other factors.
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Finance: What is Accrued Liability?0 Views
Finance Allah shmoop What is a crude liability You've been
taking free rides toe work from your vampire buddy Bernie
Yep He not only sucks he flies to you promised
him four bucks a ride payable a soon as daylight
savings makes you know the daylight too bright for him
to fly He could only give you a ride when
it's totally dark outside so you know he's got a
pretty bad sun allergy As you might guess Well anyway
after a hundred rides you realize that your crude liability
to Bernie is four hundred bucks Right there is the
math So that's a simple version Large companies with big
demands for materials or services or rent or whatever is
typically carry large at crude liabilities rights money they owe
And as you might guess they buy much or most
are almost all of their products on credit you know
credit given by the company who sold the product in
the first place Well guess what those liabilities at Crew
or just add up the company's got to pay its
bills eventually Right so big a crude liability numbers are
dangerous If you see a company having huge accounts liabilities
payable on their balance sheet So they keep adding up
until the company who took them well writes a check
and pays down that liability But you know don't worry
if you don't pay up for those rides Bernie accepts 00:01:14.21 --> [endTime] alternative methods of Payment what Oh
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What is the difference between short-term and long-term liabilities? Short-term liabilities show up on the balance sheet. They need to be paid in t...