Skid steer loader (SSL) is a multi-utility and versatile material handling equipment, which is generally deployed for transferring the material from one location to another, carrying material in its bucket or load the material into a smaller truck or trailer. SSL is a small, engine-powered equipment with lift arm used to attach a wide variety of attachments like bucket, rock breaker, backhoe, auger, forklift, sweeper, trencher, wheel saw, etc., depending on the specific application. The design of a common lift arm suitable to adapt all these attachments is a challenging process as it is subjected to different kinds of static as well as dynamic loads depending on the attachment. In this work, an effort has been made to predict the failure of the lift arm using finite element analysis (FEA). The different possible loads acting on the lift arm during its normal duty cycle as well as abnormal loads generated during abuse of the equipment are simulated using ANSYS software to predict the failure. The primary cause of failure is arrived by comparing the FEA results with the actual failed lift arm. Design improvements have been made to overcome this failure and verified using FEA. In the future, in addition to loads from the normal duty cycle, abnormal loads because of abuse of equipment shall also be given consideration during structural design of members.