A liability insurance arises under the common law on the basis of negligence or under statutory law (for e.g. - public liability insurance act or workman's compensation act) or 'no-fault basis, that is even when there is negligence. The purpose of a liability insurance cover is to provide indemnity in respect of the damages payable under the law for any personal injury to the third party or damage to the third party property.
Any type of insurance pOlicy that protects an individual or business from the risk of getting sued and held legally liable pertaining to malpractice, injury or negligence. Liability insurancePolicies covers legal costs and any legal payouts for which the insured would be responsible for, if found legally liable. Intentional damage and contractual liabilities are typically not covered in these types of policies.
Compulsory public liability insurance:
The public liability insurance Act, 1991 imposes no fault liability i.e. Irrespective of any wrongful act, neglect or default on the owner to pay relief in the event of
A) death or injury to any person (other than a workman within the meaning of workmen's compensation act)
B) damage to property of any person arising out of an accident while handling any Hazardeous substance.
No fault liability: the claimant is not required to prove that the death, injury for damage was due to any wrongful act, neglect or default of any person. The amount of Relef payable under section 3 is as per the schedule incorporated in the act as follows:
Types of public liability insurance policy:
1. Public liability industrial risks - these are the manufacturing premises including godowns, warehouse, etc.
2. Public liability non-industrial risks - for non-manufacturing entities like - hotels, motels, club houses, restaurants, boarding & lodging houses, flight kitchens, cinema halls, open air theatres, residential premises, schools, education premises, medical establishments, airport premises (other than aviation liabilities), research institutes and laboratories, schools, educational institutions, public libraries, permanent amusements park, flim studios, circus zoos, depots, warehouses, godowns, shops, tank farms and similar other non-industrial risks.
3. Public liability act - 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 available under public liability policy are:
Exclusions under the policy are:
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