Over the last three decades, significant advances have been made in the development of models to estimate losses caused by ground shaking in future earthquakes. This research focuses on losses caused by liquefaction-induced ground failure. A comprehensive study of the causes of damage and loss in recent earthquakes is used to rank the relative contribution of ground-failure to earthquake losses and to illustrate scenarios where ground-failures can dominate the losses. Subsequently, it is demonstrated that current practice for incorporating liquefaction into earthquake loss estimations is problematic in its application. Simplified approaches are based upon many assumptions and hence carry large and often undefined uncertainties, and more detailed approaches require large volumes of data, which can be prohibitive in terms of time and resources. Even if detailed analysis is possible, it is shown that many aspects of liquefaction, particularly how it impacts the built environment in terms of regional damage and losses are not well covered by our present modelling capabilities. Having identified shortcomings in current practice, which are supported by case history data from the 1999 Kocaeli, Turkey earthquake, an improved framework is proposed, which seeks to provide a pragmatic solution to the issues of spatial uncertainty and variability in ground conditions and the exposed building stock, while still producing a realistic and meaningful estimation of the expected damage distribution as a result of earthquake hazards. Within this improved framework, existing building damage scales are shown to be insufficient with respect to describing some modes of liquefaction-related damage and proposed improvements to these scales are presented. Building vulnerability to liquefaction-induced ground deformations is analytically defined, and importantly, the relative uncertainties associated with each level of input data and each stage of the analysis are carefully considered and fully documented.