In this article, the author presents the basis upon which the legal liability of commercial entities arises. The commercial entities may incur huge amounts of losses once found guilty of the offenses against them depending upon their area of operations and the legal interpretations of the offenses committed. The wrongful acts that cause legal claims may arise from one or more of the following legal bases, viz; the law of torts; statutory laws or the contractual agreements. Thus the liability loss will be the amount that a business entity may be required to pay as a result of legal claims against it for the wrong-doing that cause injury or damage to others.