Public Liability Act Insurance

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

Public Liability Act Insurance aims to provide immediate relief to the affected party in case of any damage caused by the negligence of the accused party. This Act also holds the business liable in case of any injury, death, or property damage 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 the victims.

According to the Public Liability Act Insurance, every business dealing with hazardous substances must have a policy to immediately deal with liabilities resulting from negligence due to such substances.

A hazardous substance is defined in the Environment Protection Act 1986 as: "an element or preparation which, because of its synthetic or physic-synthetic properties or managing, is a danger to cause harm to individuals, other existing animals, flora, microorganisms, other belongings or the earth".

Business owners who work with such substances must ensure they have a liability policy and renew and update the 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 that follow the exemption duties outlined in Section 3(1) of the Act. Each owner handling hazardous substances must secure an insurance policy, which should be periodically renewed before expiration to maintain coverage throughout their operations.
• An accident is any unexpected and abrupt incident involving a hazardous substance, leading 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 radioactivity.
• The owner refers to an individual or entity responsible for managing and dealing with hazardous substances during an accident. In the context of a company, this responsibility falls upon the partners, while in the 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. This Fund is utilised to make payments following the provisions of this Law and the regulations specified under Section 3 for granting relief in cases where collectors make assignments as outlined in Section 7.

According to section 3 of the Public Liability Act Insurance, In the event of an accident resulting in death, injury, or property damage to a person other than a worker, the owner is legally obligated to provide the assistance outlined in the specified list of the Act. 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 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:

• The settlement amounts are fixed for accidents, such as Rs. 25,000 for injury, death, or permanently damaged 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 Environmental Relief Fund is established in the Public Liability Act Insurance to assist the liabilities as per the Law. This Fund can be established through a formal notification issued by the Central Government. 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.

This Fund was created in section 7A of the Public Liability Insurance Act in 1991 to assist with damages caused by negligence and restore environmental pollution due to 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) of the Product Liability Insurance 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 contamination resulting from nuclear fuel or nuclear waste produced during the combustion of nuclear fuel.
• The radioactive, 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, and the insured owner bears the responsibility to ensure that it is covered.

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

• The insurance company should be notified as soon as an accident or mishappening occurs related to the company's products or services.
• All related documents and certificates must be submitted to the Collector along with the claim form.
• After this, both the convicted and the affected parties get a chance to put up their case in front of the Collector.
• Based on the details of the case, a compensation amount is decided by the Collector.
• The insurer will release the specified amount in 30 days.
• The amount may also be compensated from the Environmental relief fund as per section 7 of the Act.

The following documents are required to file a claim under The Public Liability Act Insurance:

• 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 might be needed

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

The penalty for contravention of subsection (1) or (2) of section 4 or failure to comply with directions under section 12 includes imprisonment for a minimum of one year and six months, up to a maximum of six years, or a fine not less than one rupee, or both.

If someone is found guilty of a crime 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 the 1973 Criminal Procedure Code (2 of 1974) and the 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 means the convicted cannot be exempted based on the above-stated laws.

Disobeying orders as per Section 11 sub-section 2, section 9, or Section 10(1) will result in a penalty that may include imprisonment for a period of up to three months, fines of up to ten thousand rupees, or both, depending 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 buy your policy at SecureNow. We offer a comprehensive marketplace for all policies from certified policyholder companies at competitive rates.

As discussed above, the Public Liability Act mandates business owners to have insurance policies before operations begin. It 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 irregularities.