Public Liability

Accidents can take place anytime, anywhere without notice, and a business is always at risk. In case something unfortunate happens at your property or factory, the responsibility for damage to property and people come on you as the business owner.

Since is not possible to completely avoid such instances, a business needs be prepared to resolve any legal liabilities incurred from the victims of an unfortunate accident caused on or within business premises.

Public Liability Insurance offers cover for third party liabilities (Bodily Injury / Property Damage) arising out of the premises and operations of the Insured and legal costs incurred in connection therewith.

Apart from Public liability insurance Act policy(as per the Public Liability act, 1991), policies are also available to cover the legal liability of the insured against third parties for claims arising due to industrial accidents.

Different types of policies are available:

  • to cover accidents in industries like factories etc,
  • non-industrial facilities like hotels, schools, exhibitions and storage tanks etc.
  • business units handling hazardous substances

Limits of Cover

Insurance limits are as based on Any One Accident(AOA) and Any One Year(AOY), like in most other liability policies. The minimum limit is generally the paid up capital of the firm. AOY value is expressed as a ratio to AOA, usually 1:1 or 1:2 or 1:3 or 1:4.

Extensions and Key Benefits

A public liability policy covers your officials in their business capacity or temporarily engaged employees in their private capacity, while they were performing their business.

  • The officers, committees and everybody connected to your business functions including the members of the canteen, medical, fire-fighting, social, sports or welfare organizations.
  • The personal representative of the estate of any person who would otherwise be compensated by the policy but only in respect of liability incurred by such person.
  • All costs and fees incurred with the prior consent of Insurer in the investigation, defense or settlement of any claim made against the insured.
  • The costs of representation (Defense Costs) at any inquiry, inquest or proceedings in respect of the matters that hold relevance to any claim made or might be made against the insured individual, provided that those claims are the subject of indemnity by the Policy.

Each person or party indemnified is separate under the policy, in respect of the claims made against any of them by any other person or party (except the named Insured).

For more comprehensive protection, a Public Liability Policy can be extended to cover legal expenses arising out of

If you pay an additional premium, the Public Liability Insurance (Industrial Risk) Policy can be extended to cover the following:

  • Sudden and Accidental Pollution: This will cover unintentional industrial seepage, pollution and contamination caused by an unexpected or sudden happening which would take place in its entirety at a specific time and place.
  • Act of God: This covers your property against the effects of ‘Act of God,’ which might create perils and disasters beyond the human control such as floods, tornadoes etc.
  • Liability arising out of transportation: This covers accidents directly caused by dangerous materials or hazardous substances being transported by rail, road or pipeline, under the insured’s name.
  • Effluent discharge: This protects you from accidents directly caused by treated effluents being carried by pipelines outside your premises to the discharge points. This coverage is not a part of pollution risk, unless specifically covered.
  • Technical collaborators inclusion: This will cover the legal liability to technical collaborators, pertaining to the collaboration agreement made between you and the collaborators.
  • Benefit of Retroactive Date.

Key Exclusions

A Public Liability Insurance policy will not cover any liability assumed through any agreement or contract. Other exclusions include the following cases:

  • Deliberate, intentional or willful non-compliance of any statutory provision or functioning in disregard of your technical or administrative management
  • Liability because of all personal injuries such as slander, libel, wrongful eviction, false arrest, etc. and anguish, shock, or mental injury
  • Liabilities arising out of penalties, fines, punitive or exemplary damages resulting from the burgeoning of compensatory damages
  • Loss of a pure financial nature such as loss of goodwill, loss of market, etc.
  • Infringement of plans, patent, copyright, trade name, registered design or trademark
  • Ownership, possession or use by or on behalf of you, of any aircraft, watercraft or hovercraft
  • Liability directly or indirectly caused by War and allied perils and any act of terrorism
  • Liabilities directly or indirectly caused by ionizing radiations or contamination by radioactivity from any nuclear waste or nuclear fuel or its combustion or by the toxic, radioactive, explosively hazardous properties of any nuclear assembly or nuclear component
  • Liability arising from earthquakes, volcanic eruption, flood, tempest, storm, typhoon, hurricane, tornado, cyclone or other natural atmospheric disturbance, unless covered specifically under the Act of God.
  • Liabilities arising by the transportation of dangerous materials or hazardous substances outside of the insured’s premises, unless specifically covered by the policy extension.

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