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This policy covers the amount which the insured becomes legally liable to pay as damages to third parties as a result of accidental death, bodily injury, loss or damage to the property belonging to a third party.
This policy covers the amount which the insured becomes legally liable to pay as
damages to third parties as a result of accidental death, bodily injury, loss
or damage to the property belonging to a third party. The legal cost and
expenses incurred in defending the case with prior consent of the insurance
company are also payable subject to certain terms and conditions.
One can insure more than one unit situated in different locations under a single
The policy offers a benefit of Retroactive period on continuous renewal of
policy whereby claims reported in subsequent renewal but pertaining to earlier
period after first inception of the policy, also become payable.
We issue three types of Public Liability Policies.
Public Liability Non Industrial Risk - For offices,hotels, cinema
houses,hospitals, schools etc.
Public Liability Industrial Risk - For godowns , warehouses and factories.
Public Liability Insurance Act 1991 - This is a mandatory policy to be taken by
owners ,users or transporters of hazardous substance as defined under
Environment (Protection) Act 1986 in excess of the minimum quantity specified
under the Public Liability Insurance Act 1991.
Add on covers
The Public Liability Policy can be extended to cover the following risks on
payment of an additional premium.
Natural calamities like flood, earthquake etc.
Pollution Risk subject to NOC from Pollution Control Board
How to select the sum insured?
In Public Liability Policy, the sum insured is referred to as Limit of
Indemnity. This limit is fixed per accident and per policy period which is
called Any One Accident (AOA) limit and Any One Year (AOY) limit respectively.
The ratio of AOA limit to AOY limit can be chosen from the following :
The AOA limit which is the maximum amount payable for each accident should be
fixed taking into account the nature of activity of the insured and the maximum
number of people who could be affected and maximum property damage that could
occur, in the worst possible accident in the insured's premises.
In the case of Public Liability Insurance Act 1991, the AOA limit should
represent the paid up capital of the company subject to maximum of Rs.5 crores.
The AOY limit is fixed at 3 times the AOA limit (Max.Rs.15 Crores).
How to claim?
Legal liability under the Law of Tort ,can arise under several circumstances in
insured's premises such as
Collapse of building structure
Accidental falling of fixtures
Bad maintenance or poor housekeeping resulting in accident to visitors on the
Accidental leakage of toxic substance which pollutes the atmosphere and injures
or kills people
The term "liability" means responsibility and "legal liability" means
responsibilities which can be enforced by law. Legal Liability may be
classified into Criminal Liability and Civil Liability. Only Civil Liability
claims are payable.
Civil Liability claims will arise if there is prima facie evidence of negligence
by the insured resulting in injury or death to any third party or resulting in
damage to property belonging to a person other than insured, or in insured's
Negligence will be proved only when following conditions are satisfied:
Existence of duty of care
Breach of this duty
Injury suffered by a person or property damaged as a result of that breach.
In case of any event likely to give rise to a liability claim as described
above, insurance company should be informed immediately. In case any legal
notice or summons is received, it should be sent to the insurance company. The
company has the option of arranging the defence of the case.
The event giving rise to the claim should have occured during the period of
insurance or retroactive period and the claim first made in writing against the
insured during the policy period. The maximum amount payable including defence
cost will be the AOA limit selected. The any one year limit will get reduced by
the amount of claim or indemnity paid for any one accident. Any number of such
claims made during the policy period will be covered subject to the total
indemnity not exceeding the Any One Year limit.
In case of Public Liability Insurance Act 1991 Policy, any award which exceeds
the AOA limit will be paid by the government through Environment Relief Fund to
which the insured has to contribute an amount equivalent to the premium paid
under the Public Liability Insurance Act Policy.
The policy will not pay for claims arising out of contractual liability,
intentional non-compliance of any statutory provision, loss of goodwill,slander
,fines ,penalties , libel , false arrest , defamation , mental injury etc.
Note: Policy details given are indicative, not exhaustive. Please contact your nearest NIA office for further details.