Public Liability (Act) Insurance

What if the harmful fumes puffed out by your industrial plant start causing skin problems to the people living near the plant? What if the hazardous discharge from your industry degrades the water quality of the villages nearby?

These are just a few of the many situations that could turn into reality if you are an industry that deals with hazardous material. Despite acknowledging this, would you rather wait for something terrible to happen than prepare in advance? Of course not! You just need to be safe than sorry, and that’s exactly what we help you do! The purpose of public liability insurance is to provide immediate relief to persons affected by use of hazardous materials on the principle of no fault liability. Public Liability Act insurance indemnifies against the statutory liability arising out of accidents due to handling hazardous substances as provided for, in the said Act and the rules framed thereunder.

Important Definitions

“Accident” means an accident involving a fortuitous, sudden or unintentional occurrence while handling any hazardous substance resulting in continuous, intermittent or repeated exposure to death of, or injury to any person or damage to any property but does not include an accident by reason only of war or radioactivity.
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“Handling” in relation to any hazardous substance means the manufacturing, processing, treatment, packaging, storage, transportation by vehicle, use, collection, destruction, conversion, offering for sale, transfer or the like of such hazardous substance.
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“Hazardous Substance” means any substance or preparation which is defined as hazardous substance under the Environment (Protection) Act, 1986, and exceeding such quality as may be specified by notification by the Central Government.

Who can make the claim?

The person who has sustained an injury.
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Legal representatives of the deceased, in the event of death.
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Any agent duly authorized by the persons claiming relief.
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Owner of property, damaged in case of an accident.

What are the documents required from a claimant?

Medical certificate from an authorized physician regarding injury, disability or illness.
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Medical bills and receipts.
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Death certificate/post mortem report in the case of a fatal accident.
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Employer’s certificate regarding loss of wages due to temporary and partial disability, with proof of hospitalization for a period exceeding 3 days along with date of birth certificate of the victim.
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Certificate of cost of repairs or replacement of property damaged by the accident.

Did You Know?

It does not apply to employees of the organization handling hazardous materials.

As per Section 4 of the Act, the liability has to be compulsorily insured under a contract of insurance i.e. Public Liability Insurance.

The insurance has to be taken for an amount not less than the amount of the paid-up capital of the undertaking handling any hazardous substances and owned or controlled by the owner.

Subject to the provision of sub-section (2A) of section 4 of the Act, the maximum aggregate liability of the insurer to pay relief under an award to the several claimants arising out of an accident shall not exceed INR 5 Crores and in case of more than one accident during the currency of the policy or one year, whichever is less, shall not exceed INR 15 Crores in the aggregate.

In any claim for relief, the claimant shall not be required to establish that the death, injury or damage was due to any wrongful act, neglect or default of any person. This is known as No Fault Liability. The collector having jurisdiction over the area where the accident has occurred, is empowered to hold an enquiry into any claim under the Act and to make an award of relief which appears to him to be just and to specify the person to whom the amount of relief shall be paid.