Public Liability Insurance

Public Liability Insurance Under PLI Act, 1991

All businesses are carefully nurtured for growth and profit. But as in life, inevitably, accidents occur. For instance, a client slips because of a wet floor in your business premises, resulting in hospitalization.

Exposures and liabilities not under the law can bring a bad end to a shining business future. With Liability Insurance Policy, you are covered against such legal liabilities, safeguarding your business at its best.

Types of Public Liability Insurance Policies

1. Public Liability Industrial Risks Includes manufacturing units, warehouses, and godowns

2. Public Liability Non-Industrial Risks Includes Non-Manufacturing bodies  like IT companies, BPOs, Hotels, Schools, and Clubs

3. Public Liability Act – It’s a mandatory policy that should be taken by owners, users, or transporters of dangerous substances as given under the Environment (Protection) Act 1986 over the minimum quantity defined under the Public Liability Insurance Act 1991.

How to select the sum insured?

In Public Liability Policy, the sum insured is known as the Limit of Indemnity. And it is fixed per accident and per policy period which is known as Any One Accident (AOA) limit and Any One Year (AOY) limit respectively. The ratio of the AOA limit to the AOY limit can be selected from the below: (AOA: AOY)

  • 1:1
  • 1:2
  • 1:3
  • 1:4

The AOA limit is the maximum amount compensable for each accident that should be fixed considering the nature of the activity of the insured and the maximum number of persons who could be affected and the maximum property damage that could take place, in the worst possible incidents in the insured’s premises.

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