LIABILITY

INSURANCE

LIABILITY INSURANCE

COMPULSORY (Motor T.P.,

Environment Public Liability)
VOLUNTARY (Professional
Indemnity, W.C, Product Liability
Insurance)

PUBLIC LIABILITY
INSURANCE ACT, 1991

NO FAULT LIABILITY (Claimant need not

prove that death, injury or damage was due
to any wrongful act of neglect/default)

INSURER, INSURED AND THIRD PARTY

RELIEF FOR FATAL ACCIDENT, PTD,

PPD AND TEMPORARY PARTIAL
DISABLEMENT TO THIRD PARTY

DAMAGE TO THIRD PARTY DAMAGE

WHO HAS TO TAKE THIS

POLICY?

ANYONE HANDLING HAZARDOUS

SUBSTANCES (as notified in Ministry of
Environment's regulation of March 1992) HAS
TO COMPULSORILY TAKE THIS POLICY
Handling includes Manufacture, Processing,
Treatment, Packing, Transportation by
vehicle, etc.

QUANTUM OF LIABILITY

FATAL ACCIDENT

: Rs.25,000 per person

P.T.D

: Rs. 25,000 per person

P.P.D
disablement

: Based on % of

Temporary Partial Disablement where the person is

not able to attend to his employment, fixed monthly
relief of maximum Rs.1000/- per month for a
maximum of 3 months

Medical Expenses of Rs.12,500/- in each case

DAMAGE TO PROPERTY: Rs.6,000/-

FOR HOW MUCH INSURANCE

HAS TO BE TAKEN?

FOR COMPANIES, LIABILITY (Per Accident

Limit) ATLEAST TO THE EXTENT OF PAID
UP CAPITAL.
FOR OTHERS, THE SUM INSURANCE
SHOULD BE SUM OF TOTAL ASSETS AND
STOCKS AS ON THE DATE OF
INSURANCE

WHAT WOULD BE INSURER'S

MAXIMUM LIABILITY?

PER ACCIDENT LIMIT: RS. 5 CRORES

TOTAL LIMIT UNDER THE POLICY:RS.15

CRORES.

HOW TO CALCULATE PREMIUM?

Indemnity X Rate = Premium (A)

Turnover X Rate = Premium (B)

Total Premium = A+B.....I

Environment fund premium = Equal amt as in (I)

...II
Gross Premium = I+II

PUBLIC LIABILITY (NON-INDL.

RISKS & INDL. RISKS)

INSURER, INSURED, THIRD PARTY

INDEMNIFIES INSURED AGAINST T.P.
DEATH/INJURY, DAMAGE TO PROPERTY
AS AWARDED BY ANY COURT OF LAW
LIABILITY RESTRICTED TO AOA AND AOY
CLAIMANT'S LEGAL COSTS ARE ALSO
REIMBURSED

POLICY PERIOD

EVENT GIVING RISE TO A CLAIM MUST

HAVE OCCURRED DURING POLICY
PERIOD
CLAIM BY THE THIRD PARTY AGAINST
THE INSURED MUST BE MADE DURING
THE POLICY PERIOD IN WRITING
HOWEVER, FOR CONTINUOUS
RENEWALS, RETROACTIVE FACILITY IS
AVAILABLE

MAJOR EXCLUSIONS

ACT OF GOD PERILS

WILFUL NON-COMPLIANCE OF
STATUTORY PROVISIONS
CONSEQUENTIAL LOSSES
USE OF MOTOR VEHICLE WHICH REQUIRE
COMPULSORY T.P. INSURANCE

TRANSPORTATION

POLLUTION

PRODUCT

LIABILITY TO EMPLOYEES

PREMIUM FACTORS

TYPE OF RISK.. (4 Risk Groups)

AOA Limit: AOY Limit

Turnover

Extras for Transportation, Act of God perils,

Pollution
Extras for Food beverage extensions/Swimming
Pool accidents, etc.

TYPES OF RISKS

HOTELS, RESTAURANTS, LODGES

CINEMA HALLS/AUDITORIUMS, PUBLIC
HALLS
OFFICE/ADMN PREMISES/MEDICAL
ESTABLISHMENTS, RESEARCH
LABORATORIES/AIRPORT

SCHOOLS/EDUCATIONAL INSTITUTIONS

EXHIBITIONS, STADIUMS

PERMANENT AMUSEMENT PARKS

PRODUCT LIABILITY

INSURER, INSURED, THIRD PARTY

PRODUCTS LIKE FOOD ITEMS, ELECTRICAL
APPLIANCES, MECHANICAL EQUIPMENTS SOLD
TO THE GENERAL MEMBERS OF THE PUBLIC
WHEN PRODUCTS ARE DEFECTIVE AND CAUSE
DEATH/DISABLEMENT/DAMAGE TO PROPERTY
OF THIRD PARTIES
AFFECTED THIRD PARTIES SUE THE VENDORS
IF VENDORS HAVE A PRODUCT LIABILITY
POLICY, THEY CAN GET IT REIMBURSED BY THE
INSURER

MAJOR EXCLUSIONS
PRODUCT RECALL

REPAIR OR RECONDITION
COSTS OF THE PRODUCT

COSTS FOR REPAIR OF

PRODUCTS

WILFIL NON-COMPLIANCE OF
STATUTORY PROVISION

PREMIUM CONSIDERATIONS

RISK GROUP (seven)

Turnover

Limit of indemnity for a year (unlike public

liability policy)
AOA Limit: AOY Limit
Exports extra (USA/OECD Countries, nonOECD countries)

OTHER LIABILITY POLICIES

Professional Indemnity.like doctors/chartered

accountants liability policy
Medical Establishments liability policy
Liability arising out Errors & Omissions by Stock
Brokers or Insurance Brokers in respect of their
clients