Business, Legal & Accounting Glossary

Definition: Capacity


Quick Summary of Capacity

The resource of insurance accessible to meet demand.

What is the dictionary definition of Capacity?

Dictionary Definition

  1. General: The specific ability of an entity (person or organisation) or resource, measured in quantity and level of quality, over an extended period.
  2. Banking: A Borrower’s ability to repay a debt on a timely basis, determined by deducting total cash outflows from the borrower’s total income during (typically) a month.
  3. Law: The Legal ability of an entity (person or organisation) to perform an act, such as creating a binding contract.
  4. Manufacturing: The highest sustainable rate of output (maximum number of units per month, quarter, or year) that can be achieved with current resources, maintenance strategies, product specifications, etc.


  1. The ability to hold, receive or absorb
  2. A measure of such ability; volume
  3. The maximum amount that can be held

Examples of Capacity in a sentence

If an insurance company does not have enough in assets to cover all potential claims, they are at maximum capacity and cannot write any more policies.
After the hurricane, the insurance company paid out so many claims that they lost capacity and raised premiums across the board.

Synonyms For Capacity

ability, capability, power, aptitude, potential

Cite Term

To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
Modern Language Association (MLA):
Capacity. Payroll & Accounting Heaven Ltd.
August 16, 2022
Chicago Manual of Style (CMS):
Capacity. Payroll & Accounting Heaven Ltd. (accessed: August 16, 2022).
American Psychological Association (APA):
Capacity. Retrieved August 16, 2022
, from website:

Definition Sources

Definitions for Capacity are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 13th February, 2020 | 0 Views.