Public Liability Policy

IRDAI License Number: IRDAI/INT/ISNP/2022/250

Cover defense cost
Legal advice, if required
Covernote/Risk Held Letter/Binder Letter Issued immediately after premium payment to the insurance company
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Liability Details

Public Liability Non Industrial

Public Liability Industrial

Public Liability Act

Industry/Occupation *

Liability Details

Limit of Indemnity

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Liability Details

Limit of Indemnity

Select Policy Type

Fresh

Renew

Introduction

Who can take this Policy?

Coverage

Add on Covers

Basis of Sum lnsured

Exclusions

As a follow up of Environment Protection Act of 1986, Public liability Insurance is mandatory in respect of those who handle hazardous substances by virtue of Public Liability Insurance Act of 1991. The names of hazardous substances and the quantity of each, is listed in the 'Act' and the quantity of the substance can be as low as one kilogram for Act purposes.

The Policy can be taken by anyone having a physical property such as House, Commercial Property, Machines, any other assets for which they are liable for any third party bodily injury and property damage

The policy benefits will accrue only to third parties who may suffer personal injury or damage to their property as a direct result of handling of the 'hazardous' substances.
Courts can pass awards against the insurance companies direct as privity is created by the compulsory insurance policy.

Add ons under PL Policy are as follows:

Bodily Injury & Property Damage
Personal & Advertising Injury
Medical Payment
AOG Peril Liability Extension
Travel of Executives worldwide for non manual work
Lift/Escalator Liability Extension
72 hrs sudden and pollution extension
Tenant Legal Liability
Transportation Liability
Food & Beverage extension

Limit of Liability should decided on the basis of Turnover of the Business, Employee strength, Industry Benchmarking etc.

Main exclusions under this policy are:

Product Recall
Errors & Omissions
Employer's Liability
War and Allied Perils
Pollution Liability
Damage to Insured's property or product
Liability arising out of Aircrafts/Hovercrafts/ Watercrafts or Automobiles
Contractual liability
Liability arising out of Mobile equipments
Liquor liability
Liability under Workmen's Compensation Act or similar other law

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Important Points to remember while Buying the Policy

Retroactive Date should be in continuation and limit of indemnity need to be clearly mentioned

Retroactive Date should be in continuation as in claims-made policies, it determines how far back in time an incident can occur for your policy to still protect you.
Limit of Indemnity is the maximum liability of Insurance contract and it should be clearly mentioned.

Notification of any incident which can lead to potential claim should be immediately notified to the insurance company

Any Potential Claim should be immediately notified to avoid any ambiguity at the time of claim.

AOA:AOY should always be 1:1

AOA:AOY should always be 1:1 so that for any particular incident the limit is the highest possible as per the policy.

Downloads

Proposal Form

Policy Wordings

Claim Form

Key Documents

General Claim
Intimation Format

Immediate Action Client
Should Take

Indicative General Documents
for Settlement of Claims

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Claim Case Study - 1

Situation

A heavy tank full of water fell on the person passing on the road.

Challenge

The tank was not mounted and fixed properly due to which it fell on the head which caused severe injury on the head. Since it was the responsibility of the owner hence the entire liability fell on the owner.

Solution

Third party death, disability, injury and even third party property damage is covered in a motor policy. For third party risk caused by any other reason a Public Liability policy is must.

Advisory/Conclusion

Liability policy should always be a part of corporates Insurance portfolio.

Claim Case Study - 2

Situation

A Customer who goes to a restaurant with his family for a dinner slips on the wet floor of the restaurant and fractured his leg . There was no signage of " WET FLOOR BE CAUTION".

Challenge

Customer claimed compensation form the restaurant on the ground that the duty of care was missing from the restaurant.

Solution

It was a chain of restaurant, a liability policy was taken by the corporate office. The claim made by the customer was paid from the liability policy.

Advisory/Conclusion

All sign of CAUTION must be mentioned in the premises so that such claim can be avoided.

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FAQ's

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What are the rating factors for Public Liability Industrial?

The important rating factors are nature of work done, Location, Turnover & Past claim history etc.
Can a short period Public Liability Insurance be issued?

Short period policy is a subjective matter. In some of the Event Package Policies, public liability is issued for short period but in general policy is issued for 1 year.
Can the premium be paid in quarterly/half yearly installments?

As per section 64 VB of Insurance Act, Full premium is to be paid in advance.
Is Public Liability Act policy mandatory for Manufacturing units dealing in hazardous goods?

The Environment Protection Act 1986 and the public liability act 1991 make it mandatory for the business dealing in hazardous environment to take suitable insurance.

What are the different type of policies in Public Policy?
- Public Liability Policy (Industrial Risk)
- Public Liability Policy (Non- Industrial Risk)
- Public Liability Insurance Act Policy
What is not covered under Public Liability Act Policy?

This insurance policy does not cover liability arising out of willful or intentional non-compliance of any statutory provisions, with respect to fines and penalties, all as per Act.
What are the coverage under Public Liability Act Policy?
- As per Public Liability Insurance Act, 1991, Any One Accident Limit (AOA) should not be for an amount less than the amount of the paid-up capital of your company and at the same time it should not exceed INR 5cr Any One Accident & AOY limit shall not exceed INR 15 crore in yearly aggregate.
- Transportation Liability is covered (within the meaning of “handling”)
- Territory and Jurisdiction is India only
- Deductible is “Nil”
- Amount equal to premium is contributed toward ERF (Environmental Relief Fund of Ministry of Environment)
- Claim award/settlement amount is decided by the District Magistrate/ Collector
- Liability in respect of each claimant is limited as per section 3 (1) of the act as:
- INR 25,000 per person for fatal accidents
- INR 12,500 for medical expenses incurred
- Damage to private property limited to INR 6,000
- fixed monthly relief not exceeding INR 1,000 per month up to a maximum of 3 months for loss of wages due to temporary partial disability
Which are the sectors for which Public Liability Non Industrial Policy can be issued?

The Policy is meant for Non Manufacturing units like hospitals, retail outlets, schools, IT Companies, BPO's, Clubs etc.

When does the claim triggers under Public Liability?

Claim gets triggered under Public Liability only after insured gets a legal notice.
what is the maximum liability of Insurance company under Public Policy?

The maximum liability of an Insurance company in a policy is the Limit of Indemnity.
What are the documents required for Claim Process in Public Liability Insurance?
Following documents are required in order to get claims under public liability insurance:
- Dully filled claim form with all the documents
- Medical certificates in case of injury or death
- Copies of evidence and proof
Is loss of Goodwill covered under PL Policies?

No, Loss of Goodwill is an exclusion under PL Policy.

What is the maximum Limit of Indemnity under PL Liability Act Policy?

Maximum limit of indemnity under PL Liability Policy in a year is INR 15 Cr.
What are the advantages of Public Liability Insurance?
Looking at various levels of risks involved with various kinds of business, it makes sense to purchase a public liability insurance. Some of the advantages of this insurance are:
- It will cover for any kind of accident the public faces because of your business
- It will cover any damage to public property caused due to your business
- It will let you continue with your work without any hindrance in spite of liability issues
- It will help get coverage for legal fees, in case you need to go to the court for some liability case
In Public Liability Act Policy, what is the ratio of AOA:AOY offered?

The ratio offered by insurers is 1:3
In which year public liability act was passed in Indian Parliament?

Public Liability Bill became Public Liability Act in the year 1991.