Public Liability Act Insurance

The Public Liability Insurance act is enacted to provide for all owners involved in the production & handling of hazardous substances, a sense of financial security. It was introduced to provide direct assistance to the victims (other than workers) affected by the accidents occurring while handling of hazardous substances by the insurance amount paid by the owners.

The bare act defines "Handling" in relation to any hazardous substance as the manufacture, processing, treatment, packaging, storing, transportation, collection, destruction, conversion, offering for sale, transfer, or the like of such hazardous substance.

Public liability insurance act 1991 is a mandatory liability policy for owners involved in the production & handling of hazardous substances, wherein immediate relief is provided to the victims other than workers. It came into effect mainly due to Union Carbide incident (popularly known as Bhopal gas tragedy) of 1984. Such incidences are unpredictable & unavoidable due to which this Policy came into effect.

• Fixed settlements amount will be provided to the claimants irrespective of the sum insured like:
1. Rs. 25000 in case of death & permanent disability of the third person
2. Rs. 12500 will be paid for medical expenses.
3. Rs. 6000 will be paid for property damages of the concerned person.
4. Rs. 1000 per month, up to 3 months as fixed monthly relief will be provided in case of loss of wages due to temporary partial disability.
• No Fault Liability - In any claim for relief, the claimant shall not be required to plead and establish that the death, injury or damage in respect of which the claim has been made was due to any wrongful act or negligence of any person.
• Client need not to pay any amount at the time of claim as deductible is Nil.

Inclusion under the Public Liability Insurance Act are noted below:

• Injuries caused due to handling of hazardous goods in any way.
• Death or disabilities of the victims.
• This Act covers all locations within India.
• After issuance of the policy, insurer can cancel the policy within 30 days & premium will be refunded after some deductions (pro rata basis).

Exclusions under the Public Liability Insurance Act are noted below:

• Any amount claimed after 5 years from the date of occurrence of accident should not be entertained.
• Matters outside of the scope of Public Liability Insurance Act, 1991 are excluded.
• Intentional non-compliance with the statutory requirements of the Act.

Steps for filling a claim under Public Liability Act claim are described below:

• As soon as there is an injury, death or partial disability or the Property damage of the person other than the workman, the Insured (owner) should inform the same to the insurer.
• All the medical certificates & the documents are required to be submitted with the Collector along with the Public Liability Act claim form.
• The Collector after receiving the claim form, will give both the parties i.e., Insured & affected party an opportunity to be heard basis which the amount of the reward is finalised by him.
• After finalisation of the amount, the insurer will release the amount within 30 days.
• The Collector can also arrange the award from the relief fund in accordance with the scheme made under section 7A.

Below is the list of documents required for filing a claim under Public Liability Act insurance:

• Duly filled claim form along with the requisite documents
• Medical certificates in case of an injury or death
• Copies of evidence and proofs mentioned above