Professional Indemnity Insurance Policy

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The Public Liability Act 1991 was made effective from 1st April 1991. The object of this Act is to provide through insurance immediate relief to persons affected due to accident while handling hazardous substance by the owners on no fault liability basis. This has also been brought under Tariff. The definition of Owner is so comprehensive as to cover any person who owns or has control over any hazardous substance at the time of accident. This includes any Firm or its partners. Association or its members Company or its Directors and all other persons associated and responsible to that Company in the conduct of their business.

The various terms like Accident Hazardous substances as defined in the Act are given below.

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.

Handling in relation to any hazardous substance means the manufacture processing treatment package storage transportation by vehicle use collection destruction conversion offering for sale transfer or the like of such hazardous substance.

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.

Hazardous Substance means any substance or preparation which is defined as hazardous substance under the Environment (Protection) Act 1986 and exceeding such quantity as may be specified by notification by the Central Government.

Hazardous Substance means any substance or preparation which by reason of its chemical properties or handling is liable to cause harm to human beings other living creatures plants micro-organism property or the environment (as per the Environment (Protection) Act 1986

Insurance limits

Insurance limits are as below:

• Any one accident : Minimum equal to Paid up Capital upto a maximum of Rs.5 crores.
• Any one year : 3 times of `Any one accident limit subject to a maximum of Rs.15 crores.

Liability beyond Insurance

• In case of claim/s exceeding the above statutory limit/s it is to be met by the Environmental Relief Fund to be set up under Section 7A of the Act and managed by the Authority appointed by the Central Government.
• The liability beyond the total of the insurance and the Relief / Fund is to be borne by the Owner.

Contribution to the relief fund

• An amount equal to the insurance premium chargeable is to be paid simultaneously by every owner with the insurance premium to the underwriting Company.
• All proposals can be rated and accepted at DO level in terms of the rating structure laid down.

Schedule of Compensation

Policy will not Pay under below circumstances:

• Reimbursement of medical expenses incurred upto a maximum of Rs.12 500 in each case.
• For a fatal accident the relief will be Rs.25 0 per person in addition to reimbursement of medical expenses if any incurred on the victim upto a maximum of Rs.12 500
• For permanent total or permanent partial disability or other injury or sickness the relief will be :

(a)Reimbursement of medical expenses incurred if any upto a maximum of Rs.12 500 in each case and

(b)Cash relief on the basis of percentage of disablement as certified by an authorized physician. The relief for total permanent disability will be Rs.25 0

• For loss of wages due to temporary partial disability which reduce the earning capacity of the victim there will be a fixed monthly relief not exceeding Rs.1 0 per month upto a maximum of 3 months provided the victim has been hospitalized for a period exceeding 3 days and above 16 years of age.
• In respect of damage to private property upto Rs.6 0 per claim.

Apart from Public liability insurance Act policy policies are also available to cover the legal liability of the insured against third parties for claims arising due to industrial accidents. Two different types of policies are available to cover accidents in industries like factories etc and non industries like hotels schools exhibitions and storage tanks etc.