Public Liability Act Insurance
The main objective of the Public Liability Insurance Act 1991 is to provide for damages to victims of an accident which occurs as a result of handling any hazardous substance. The Act applies to all owners associated with the production or handling of any hazardous chemicals. The PLIA makes it mandatory for persons handling , or controlling, hazardous substances to take out one or more policies of insurance by which he is insured against liability to provide relief to affected persons on the principle of ‘No fault’. That is, the affected person does not have to establish that the accident occurred owing to the fault or negligence of the person owning or controlling the hazardous substance. CPCB has recently issued directory to state pollution control boards that they should not grant consent to establish ( CTE) and consent to operate ( CTO) if the owner does not comply with PLI Act 1991. In case an owner fails to have an PLI Act policy, penalty/ fines :- imprisonment from 3 months to 7 years and fines ranging from 1K to 1 Lac for non compliance of vide range of provision.
Coverage
Policy covers statutory liability as per Act. The liability is towards property damaged, injury, death, medical expenses, loss of earning to third party. One has to buy an insurance policy for an indemnity limit amount equal to paid up capital subject to maximum of ₹ 5 crores. However,the liability of the insurer is limited to maximum ₹ 5 crores AOA and ₹ 15 crores AOY.
Exclusions
The policy is subject to exclusion. Some of the major exclusions are:
- Liability arising out of deliberate, willful or intentional non-compliance of any statutory requirement and/or provision.
- fines, penalties, punitive or exemplary damages or any other damages resulting from the multiplication of compensatory damages.
- Liablity applicable under any other laws.
- liability directly or indirectly occasioned by, happening through or in consequence of war, invasion, act of foreign enemy, hostilities (whether war be declared or not) civil war, rebellion, revolution, insurrection or military or usurped power;
- liability arising out of ionizing radiations or contamination by radioactivity from any nuclear fuel or from any nuclear waste 7 In respect of losses/liability arising outside India. 10.8 Arising out of any Injury and/ or Damage occurring prior to the Retroactive Date in the Schedule. Provided always that in the event of any Injury
Premium
Insurance company charges premium for the coverage and the rating pattern is same among insurance companies except the commercial/ good feature discounts. An equal amount is also collected towards ERF ( environment relief fund ) constituted by the central government and maintained by a designated insurance company.
Claim Procedures:
An application for claim by the affected party should be made before the district collector within 5 years from the occurrence of the accident. After hearing both the parties and making necessary verification, the district collector shall make an award of relief to the affected party. The compensation amount will be as per the following schedule. The maximum liability will be as per AOA/AOY limit.
- In case of death/injury/ property damage, as per schedule 3(1) of PLI Act, owner is liable to pay compensation as per schedule ( for no fault liability).
- Dist. Collector will be the competent authority to award compensation.
- As per schedule fatal accidents amount is ₹ 25 K
- Permanent total/partial disability as per %
- Medical expenses max. ₹ 12500
- Property damage maximum ₹ 6k
- Temporary Partial disability ₹ 1k per month upto maximum