The Bhopal Gas tragedy raised questions about social responsibility of Business Corporate & Central Government in India and emphasised to provide for speedy relief to the unfortunate victims of such disasters / tragedies. To this end, the “Public Liability Insurance Act,1991” was enacted.
The PLI Act casts an obligation on every owner before they commence to handle any hazardous substance, to obtain a Public liability insurance Act Policy. Every owner shall take out, before he starts handling any hazardous substance, one or more insurance policies providing for contracts of insurance whereby he is insured against liability to give relief under sub-section(1) of section 3; Provided that any owner handling any hazardous substance immediately before the commencement of this Act shall take out such insurance policy or policies as soon as may be and in any case within a period of one year from such commencement.
Handling means “Manufacturing, processing, treatment; Packaging; Storage; Transportation by vehicle; Use, collection, destruction, conversion, offering for sale; Transfer or the like of any substance or preparation of hazardous substances.
The Public Liability Insurance Act Policy covers your legal liability to indemnify the affected parties in respect of 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.
Liability in respect of each claimant is limited as per section 3(1)of the act as:
Public liability insurance is limited to only relief on a limited scale of immediate relief & hence would not prevent the victims to go to Courts for claiming larger compensation.