This Insurance Policy protects the business against claims of injury or damage sustained by members of the public including customers, clients, delivery people or passers-by incurred as a result of your business’ activity or products your business provides. If something unexpected happens in the course of your business and someone is hurt or if their property is destroyed or damaged, Public Liability Insurance could help cover the resulting costs.
Scope of Cover
This policy covers the amount which the insured becomes legally liable to pay as damages to third parties as a result of accidental death, bodily injury, loss or damage to the property belonging to a third party. The legal cost and expenses incurred in defending the case with prior consent of the insurance company are also payable. The policy offers a benefit of Retroactive Period on continuous renewal of policy whereby claims reported in subsequent renewal but pertaining to earlier period after first inception of the policy, also become payable. More than one unit situated in different locations can be insured under a single policy.
Types of Public Liability Insurance Policies
1. Public Liability Industrial Risks - For manufacturing units, godowns and warehouse
2. Public Liability Non Industrial Risks - For Non-Manufacturing entities like IT companies, BPOs, Hotels, Schools, Restaurants and Clubs
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.
Sum insured In this Policy, the sum insured is referred to as Limit of Indemnity. This limit is fixed per accident and per policy period which is called Any One Accident (AOA) limit and Any One Year (AOY) limit respectively. The AOA limit which is the maximum amount payable for each accident should be fixed taking into account the nature of activity of the insured and the maximum number of people who could be affected and maximum property damage that could occur, in the worst possible accident in the insured's premises. The ratio of AOA limit to AOY limit can be chosen from 1:1, 1:2, 1:3, and 1:4.
In the case of Public Liability Insurance Act 1991, the AOA limit should represent the paid up capital of the company subject to maximum of Rs.5 crores. The AOY limit is fixed at 3 times the AOA limit (Max.Rs.15 Crores).
For Industrial risks
Acts of God i.e Natural calamities like flood, earthquake etc.
Pollution Risk i.e. Sudden and Accidental Pollution
Transportation Risk of Carriage of treated effluents etc.
For Non-Industrial risks
Goods kept in custody of insured.
Food and beverages extension
Industrial seepage, pollution and contamination extension
Sports facilities, swimming pool and other facilities extension
Act of God Perils Excess
Policy is subject to compulsory excess .Higher excess opted on a voluntary basis qualifies for discount in Premium
Intentional non-compliance of any statutory provision
Loss of goodwill