An issue of great concern to water utilities is the potential for an outbreak of waterborne disease. The potential for illness within the community is not the only reason for alarm. The financial burden placed on a utility as a result of lawsuits arising from waterborne disease outbreaks is also a problem. The goal of this paper is to briefly explain the legal system as it relates to water utility liability in cases of waterborne disease outbreaks. The primary legal theories available in courts in the US which may be used to sue water utilities and the defenses to them are discussed. Ideas for the preparation for and the responses to an outbreak are also included.