Public Liability Insurance Act 1991 | UPSC

Public Liability Insurance Act 1991 | UPSC – Full Details Of Public Liability insurance Act Is Provided Below For UPSC And Other Competitive Exams.

Public Liability Insurance Act 1991 | UPSC
Public Liability Insurance Act 1991 | UPSC

What Is Public liability ? 

  • Public liability insurance policy covers a policyholder from claims from third parties for death or injury or property damage caused by hazardous substances handled in a factory.

What does PLI Act say?

  • Public Liability Insurance (PLI) Act, 1991 makes it obligatory upon the user industries handling 179 types of chemicals and compounds and other classes of flammable substances to subscribe to a special insurance policy to cover the liabilities likely to arise on account of any chemical (industrial) disaster/accident and payable to those affected people who are not the workers on ‘no-fault basis’/ ‘absolute liability.
  • The Act establishes an Environment Relief Fund (ERF), which is subscribed by all such user industries by an amount equal to the annual premium amount of such insurance policies.

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Public Liability Insurance Act 1991

  • Public Liability Insurance Act,1991 is to provide the compensation for damages to victims of an accident of handling any hazardous substance or It is also called, to save the owner of production/storage of hazardous substance from hefty penalties.
  • This is done by proving compulsory insurance for third-party liability. As from the name of the act, it is Public Liability.
    The Act came into being in the aftermath of the Bhopal Gas Tragedy.
  • This law requires all enterprises that own or have control over handling of any hazardous substance, to subscribe to a “public liability insurance policy cover” whereby they are insured against the claims from third parties for death or injury or property damage caused by hazardous substances handled in their enterprise.
  • The compensation payable under this Act is also irrespective of the company’s neglect.
  • The victims who are exposed to hazardous substances used by the industry may file a claim with the Collector within 5 years of the accident.
  • On receipt of an application, the Collector, after giving notice to the owner and after giving the parties an opportunity of being heard, will hold an inquiry into the claim and may make an award determining the amount of relief which appears to him to be just.
  • Public Liability Insurance Act is administered by the Ministry of Environment Forest and Climate Change.

Criticisms:

  • The amounts under this Act, as specified in the Schedule, were stipulated nearly two decades ago.
  • Resultantly, the compensation under the Act is very meager and the families of victims’ who have died due to the gas leak or have suffered permanently disability, are entitled only to a maximum compensation of Rs 25,000, in addition to a maximum of Rs. 12,500, as reimbursement for medical expenses.
  • In cases where a victim has suffered permanent partial disability or other injury or sickness, the relief available if (a) reimbursement of medical expenses incurred, if any, up to a maximum of Rs. 12,500 in each case and (b) cash relief on the basis of percentage of disablement as certified by an authorized physician.
  • For loss of wages due to temporary partial disability which reduces the earning capacity of the victim, a fixed monthly relief not exceeding Rs. 1,000 per month has been stipulated, up to a maximum of 3 months, provided the victim has been hospitalized for a period exceeding 3 days and is above 16 years of age.
  • For any damage to private property, an amount of up to Rs. 6,000 is payable, depending on the actual damage.

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