Limitation of Liability Act

The Limitation of Liability Act is a law that sets rules for how much compensation a party can be held liable for in certain situations, often in maritime or shipping contexts. It allows businesses or individuals to limit their financial responsibility to a specific amount, usually based on the value of the property involved. This means that if an incident occurs, like a shipping accident, the liable party's payout is capped, protecting them from potentially ruinous claims. This act aims to encourage trade and investment by reducing the risk associated with potential losses.