Public Liability (Act) Insurance

The Public Liability Insurance Act 1991 mandates public liability insurance for all businesses and companies dealing with hazardous substances. The Environmental Protection Act of 1986 specifies these hazardous substances. Any company or organisation responsible for manufacturing, processing, handling, or distributing such substances must take out public liability insurance policies beforehand.

It aims to provide immediate relief to affected party in case of damage caused by negligence of accused party. This Act also holds the business liable in case of any injury, death, or property damage. Public liability insurance act 1991 covers public liability insurance if it is related to or caused by substances in his possession.

The act also considers the environmental damages caused by such hazardous substances and includes that in the penalty. Mandating a Public Liability Insurance Policy creates financial security for the business owner and ensures claim settlement for victims.

The Public Liability Insurance Act 1991 notes that firms handling hazardous substances must have a policy for liability management. Which resulting from negligence because of such substances.

The Environment Protection Act of 1986 defines a hazardous substance as:
A harmful substance or product can cause damage to people, animals, plants, or the environment. Its properties are man-made or partly man-made properties or the way it is used

Business owners who work with such substances must ensure they have liability policy, renew and update insurance policy timely. The Act also states a minimum amount mandatory for this insurance.

Here are some provisions made by the Public Liability Act Insurance:

• Before dealing with hazardous substances, owners should have insurance policies. Which follow exemption duties outlined in Section 3(1) of Act. Each owner handling hazardous substances must secure an insurance policy. To maintain coverage throughout their operations, it should be renewed frequently before expiration.
• An accident is any unexpected and abrupt incident involving a hazardous substance. It leads to prolonged or temporary exposure or harm to an individual. The only accidents excluded from this definition are those caused solely by war or war-related poisonous.
• The owner refers to an individual or entity responsible for managing and dealing with hazardous substances during an accident. This responsibility falls upon the partners, while in case of an association, it lies with any of its members.
• The Central Government can create the Environmental Assistance Fund by issuing a formal notification. Fund makes payments in accordance with provisions of the law and regulations specified under Section 3. This is for granting relief in cases where collectors make assignments as outlined in Section 7.

Sec 3 of PLI Act deals with accidents causing death, injury, or property damage to individuals other than workers. In such situations the owner must legally provide the assistance outlined in the specified list of the Act. Here injury refers to a permanent disability caused by an accident.

Another relief for the claimant is that there is no need to prove any negligence or ill-intention of the owner. That is behind the accident that results in the damage. The affected party is liable for immediate relief and assistance by the owner as specified.

The features and benefits provided by the Public Liability Act Insurance are as follows:

• We set the settlement amounts in advance for accidents, such as Rs.25,000 for injuries, death, permanent damage to individuals. Rs.12500 for medical expenses, Rs.6000 for property damages, etc.
• The policy removes the need for the injured party to plead and prove their case in court for a settlement. They are eligible for immediate relief.
• The Act also incorporates environmental issues and addresses them with the Environmental Relief Fund.
• It also gives support and assistance to the companies. As it ensures they can always provide compensation through insurance policies.

The Public Liability Act Insurance establishes the Environmental Relief Fund to address liabilities in accordance with the law. A formal notification issued by the Central Government can establish this Fund. This notification outlines crucial aspects such as the Fund's location, management procedures, the format for depositing and withdrawing funds. And other relevant matters concerning the administration and distribution of assistance benefits.

Section 7A of the Public Liability Insurance Act in 1991 created this Fund. It assists with damages caused by negligence and restore environmental pollution because of such accidents. It also covers compensation the National Green Tribunal (NGT) provides for environmental harm.

The Public Liability Act Insurance excludes the following:

• The wilful or intentional non-compliance with any statutory provisions by the business.
• Fines, penalties, punitive and exemplary damages.
• Any damages arising from any other statute except as provided in Section 8, Sub-sections (1) and (2) Act.
• Any harm or loss to property owned, rented, leased, or under hire purchase, including items on loan to the insured. Or within the insured owner's possession, supervision, or responsibility.
• Damages and losses resulting from war, invasion, acts of foreign enemies, hostilities (whether formally declared or not), civil war. Unrest, rebellion, revolution, insurrection, and actions of military or usurped power.
• Harmful effects caused by ionising radiation or infection resulting from nuclear fuel or nuclear waste.
• The poisonous, toxic, explosive, or other potentially hazardous properties of any explosive nuclear assembly or nuclear substance.

Suppose the company claims that certain aspects fall under the exclusions. In that case, the policy does not cover the claim. The insured owner is responsible for ensuring that it has coverage.

The following are the steps for claiming the Public Liability Act Insurance:

• Notify the insurance company promptly in case of an accident or mishap. If related to the company's products or services.
• Submit all pertinent documents and certificates, along with the claim form, to the Collector.
• After this, both the convicted and the affected parties get a chance to put up their case in front of the Collector.
• The Collector determines the compensation amount based on the case details.
• The insurer will release the specified amount in 30 days.
• Compensation from the Environmental Relief Fund, as per Section 7 of the Act, may also cover the amount.

To file a claim under The Public Liability Act Insurance, the following documents are necessary:

• Claim form filled with necessary and relevant details.
• Medical proofs of injury and damages
• Copies of relevant certificates and evidence if any
• A copy of the policy may be necessary.

The policy holder must maintain records of their annual turnover. The company has the right to request and inspect these records whenever necessary and reasonable.

Penalty for contravention of subsection (1) (2) of section 4 or failure to comply with directions under section 12. It includes imprisonment for a minimum of one year and six months, up to a maximum of six years. It may be a fine not less than one rupee, or both. If a court convicts an individual of an offense under section 1.

And it is their second or subsequent offence. They will face a mandatory prison term of at least two years, extending up to seven years. Additionally, they will be subject to a fine of not less than one lakh rupees.

The provisions stated in Part 360 of 1973 Criminal Procedure Code (2 of 1974) and 1958 Criminal Law (20 of 1958). Do not apply to individuals convicted of an offence under this Act. Except in cases where the convicted person is under the age of 18 years. This implies that we cannot exempt the mentioned laws.

Disobeying orders as per Section 11 sub-section 2, section 9, or Section 10(1) will result in a penalty. It may include imprisonment for a period of up to three months, fines of up to ten thousand rupees, or both. It depends on the severity of the offence.

You must consider various factors before committing to a Public Liability Act Insurance. The premium amount, policy duration, renewal rules, etc., come first. Consider the company's reputation and past performance.

Ensure that you understand all policy-related terms and conditions. Ask for deductibles and coverages. You can purchase your policy through SecureNow. We offer a comprehensive marketplace for all policies from certified policy holder companies at competitive rates.

As discussed above, the Public Liability Act mandates business owners to have insurance policies before operations begin. This is ideal to talk to an expert, consult various companies and buy insurance that suits your business.

The Law mandates the owner to bear responsibility for the damage and, in turn, pay for the compensation. Such costs can be heavy for even established organisations. Public Liability Act Insurance is valuable when dealing with such accidents or defects.