Public Liability Insurance act -1991

1. P U B L I C
L I A B I L I T Y
I N S U R A N C E
A C T, 1 9 9 1
P R E S E N T E D B Y ,
S H A K E E B A F A H E E M P K
2 1 E N V A 1 6

2. INTRODUCTION
• Two Incidences in 1984 and 1986 in the country forced Govt. to enact
this act to protect the interest of the general public. In 1984 Bhopal Gas
tragedy took place where lakhs of people either died or got bodily injury
because no fault of theirs as the poisonous gas leaked from the Union
Carbide Plant. Similarly in 1986 another tragedy took place Shriram
Chemicals Delhi resulting again lakhs of people were affected
• After these two incidences, the govt. enacted the law where it is made
compulsory that all companies/ individuals/persons owing/dealing in
hazardous goods are required to take insurance policy satisfying the
limits specified in the act.
• Under The Act the owner’s fault or negligence causing accident need not
to be proved.
• The list of hazardous chemicals is also provided in the Act

3. • Liability Insurance is available to protect you against liability arising out of any
accident affecting any person(s) occurring while handling hazardous substances
• Came into force on 01st April 1991
• Act provides the mechanism for providing immediate relief in case of accidents
occurring while handling hazardous substances.
• Liability on ‘No Fault Basis’
• Liability to pay damages to victims of accidents other than the Workmen ( For
workmen, payment of compensation is determined under Workmen
Compensation Act )

4. PURPOSE & SPECIALITY OF THE ACT
• To provide immediate relief to persons (other than workmen) affected
by accidents occurring while handling hazardous substances and for
matters connected therewith or incidental thereto, through the
insurance amount paid by the owner of the hazardous substance.
• It ensures `No Fault Liability’ against the owners of hazardous
substances. In other words, it could be said that the owner of a
hazardous substance must have insured so that any person injured or
died of any hazardous substance could claim compensation ,
without going into any question of fault on the part of the owner.

5. DEFINITIONS
• (a) "accident" means an accident involving a fortuitous or sudden or unintended occurrence
while handling any hazardous substance resulting in continuous or intermittent or repeated
exposure to death of, or injury to, any person or damaged to any property but does not include
an accident by reason only of war or radio-activity
• (b) "Collector" means the Collector having jurisdiction over the area in which the accident occurs;
• (c) "handling", in relation to any hazardous substance, means the manufacture, processing,
treatment, package, storage, transportation by vehicle, use, collection, destruction, conversion,
offering for sale, transfer or the like of such hazardous substance
• (d) “hazardous substance”, means any substance or preparation which is defined as hazardous
substance under the Environmental protection act 1986, as exceeding such quantity as may be
specified, by the notification , by the Central govt
• (e) “insurance" means insurance against liability under sub-section (1) of Section 3
• (f) "notification" means a notification published in the Official Gazette

6. • (g) "owner means a person who owns, or has control over handling, any
hazardous substance at the time of accident and includes:
• -(i) in the case of a firm, any of its partners;
• (ii) in the case of an association, any of its members;
• (iii) in the case of a company, any of its directors, managers, secretaries
or other officers who is directly in charge of, and is responsible to, the
company for the conduct of the business of the company
• (h) "prescribed" means prescribed by rules made under this Act
• (ha) "Relief Fund" means the Environmental Relief Fund established
under Section 7A
• (i) "rules" means rules made under this Act;
• (j) "vehicle" means any mode of surface transport other than railways.

7. ADVISORY COMMITTEE
• (1)The Central Government may, from time to time, constitute an
Advisory Committee on the matters relating to the insurance
policy under this Act.
• (2) The Advisory Committee shall consist of—
• (a) three officers representing the Central Government;
• (b) two persons representing the insurers;
• (c) two persons representing the owners; and
• (d) two persons from amongst the experts of insurance or
hazardous substances.to be appointed by the Central
Government.
• (3) The Chairman of the Advisory Committee shall be one of the
members representing the Central Government, nominated in
this behalf by that Government.

8. THE PERSONS WHO CAN INSURE OR
APPLY CLAIM/RELIEF UNDER THIS ACT
• Every owner of any hazardous property, before handling that
property, shall take one or more insurance policies providing
contracts of insurance whereby he is insured against the liability
to give relief claimed by the person injured or suffered any loss
occurred due to that hazardous substance.
• a) The person who has sustained the injury
• b) The owner of the property to which the damage has been
caused
• c)The legal representatives of the deceased, in case of death
occurred as a result of the accident and
• d)The authorized agent of the above mentioned.

9. • Any application for claim or relief under this act shall be made to
the collector under whose jurisdiction the accident
occurred/hazardous substance lies.
• Five years from the date of occurrence of the accident.

10. PROCEDURE FOR CLAIMING INSURANCE
• The collector, after entertaining the application, shall issue notice to the
parties and give opportunity of being heard. Then, the collector holds an
inquiry regarding the amount claimed and determines a final amount to be
settled as compensation.The copy of the award delivered should be
delivered to the parties within 15 days from the date of delivery of the
award.
• STEPS:
• Evaluate and analyze the loss and damage you have encountered
• inform the insurance company as soon as possible; this should be done in
writing
• Collect the evidence and proof
• Apt medical certificates in case of injury or deathSubmit duly filled in claim
form along with the required documents
• An assessor will evaluate the case and decide whether to accept or reject

11. The award is binding on the parties and the insurer who is
liable to pay the amount mentioned in the award, shall pay
the amount within 30 days from the date of announcement
of the award.
Application
To be made
by the victim,
owner or
property,
Authorised
agent
Application
should be
made within 5
years
Application to
made to
collector with
certificates for
health
damage or
property
damage.

12. WHAT AFTER APPLICATION
Notice to
parties
Opportuni
ty to hear
Enquiry to
claims
Application
to be
disposed
within
months
Give the
awards
Send copies
to the
parties
Insure to
deposit
amount
Owner to
deposit the
money
If fails
recover the
money

13. CLAIM LIMITS
PARTICULARS LIABILITY
Reimbursement of medical expenses in each
case
Maximum up-to Rs. 12500
Fatal accidents Rs. 25000 plus reimbursement up-to 12500
Permanent Total or permanent partial
disablement
Reimbursement of medical expenses up-to
12500 plus in case of total permanent disability,
case relief of Rs.25000
For loss of wages temporary partial disability (if
victim hospitalized for more than 3 days and is
above 16 years of age)
Fixed monthly relief up-to 1000 per month for
maximum three months

14. PENALTIES FOR NON COMPLIANCE
• Both imprisonment which extends from 3 months to 7 years
and fine which extends from Rs.1000 to Rs.1 lakh for non
compliance of a vide range of provisions of this act.
OFFENCES PENALTIES
Failure to take insurance policy, renew
policy or deposit amount for
Environment relief fund
5 to 6 years of imprisonment along with
fine
Penalty for repeat offenders 2 to 6 years imprisonment
Failure to comply the order of authority
for inspection, search and seizure,
information.
Upto 3 months or Rs 10000 fines

15. TYPES OF PUBLIC LIABILITY
INSURANCE
• In India, Public Liability Insurance is classified into three major
types:
• 1) Public Liability Insurance (Industrial Risks): This is meant for
manufacturing units and warehouses.
• 2) Public Liability Insurance (Non-Industrial Risks): This is meant
for any non-manufacturing units like hospitals, retail outlets,
schools, IT Companies, BPOs, clubs, etc.
• 3) Public Liability Insurance under the Public Liability Act: The
Environment Protection Act 1986 and the Public Liability
Insurance Act 1991 make it mandatory for the business dealing

16. COMPANIES OFFERING PUBLIC
LIABILITY INSURANCE IN INDIA
• India is a developing country with industries under various
sectors that would need public liability insurance because of
associated risks involved. Some of the companies providing
public liability insurance in India are:
• TATA AIG
• HDFC Ergo
• United India Insurance
• Bajaj Allianz

17. EXCLUSIONS ( WHERE WE CAN’T
CLAIM FOR INSURANCE )
• Though the public liability insurance covers most of the cases,
there are certain situations not covered under this insurance.
These are also called exclusions.
• Some of these cases are:
• Lapse in performing legal or contractual liabilityIntentional
non-compliance of safety or legal provisionLoss of goodwill,
mental loss or damage, libel, slander, false arrest, defamation
and other similar cases

19. THANK YOU