Optima Insurance Brokers Pvt. Ltd.


Our views on important risk issues and emerging risks.

Public Liability Insurance – Act Only

Public Liability Insurance Act 1991 provides compensation to victims of an accident which occurs as a result of handling of any hazardous substance. The Act applies to all owners associated with the production or handling of any hazardous chemicals.

Public Liability Insurance (Act Only) covers the risk of compensation to be paid under the Act.

It is important to understand who is the “Owner” as the Act directly makes them responsible for providing the accident relief. As per the Act the “Owner” means any person who owns, or has control over handling any hazardous substance at the time of accident and includes;

(i) in the case of firm, any of its partners;
(ii) in the case or a company, any of its directors, managers, secretaries or other officers who is directly in charge of & is responsible to the company for the conduct of the business of the company

As per the Act:

1.The Liability of the Owner, per accident,is equal to Paid Up Capital of the firm or company with maximum liability up to Rs. 5 Cr.
2.The Liability of the Owner, per year, is upto a maximum of Rs. 15 Cr.
3.In case of a claim by any Third Party, the claimant is not required to prove any negligence or fault of the owner.
4.Apart from death the Act also imposes penalty for “Injury” which includes permanent total or permanent partial disability or sickness resulting out of an accident.
5.The claim award and settling authority is the District Collector.


Some of the industries which have to take Public Liability Insurance (Act Only) are:

1.Chemicals & fertilisers
3.Industries using bulk LPG in tanks like Engineering workshops, food manufacturing, textiles
5.Thermal Power plants
6.Refineries of various types
7.LPG Plants
8.Petroleum based industries
9.Industrial gas manufacturers and storage facilities
10.Logistics, storage & distributors handling any of the substances above
11.Glass & Ceramics mfg industries
12.Basic metals like Steel, Aluminium, Copper mfg
13.Cement mfg
15.Coal handling & using plants


Does your business fall with the PLI (Act) ? Please contact us if you would like to know more.

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Optima’s core group has more than 100 man-years of experience in insurance. Our experience has trained us in reading the fine print of insurance policies, understanding it and applying it for the benefit of our clients.

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