Liability Insurance


An Act to provide for public liability insurance for the purpose of providing immediate relief to the persons affected by accident occurring while handling any hazardous substance and for matters connected therewith or incidental thereto.

Be it enacted by Parliament in the Forty-first Year of the Republic of India as follows:

  1. Short title and commencement – (1) This Act may be called the Public Liability Insurance Act, 1991.

(2) It shall come into force on such date as the Central Government may, by notification, appoint.

  1. Definitions – In this Act, unless the context otherwise requires, –

1[(a) “accident” means an accident involving a fortuitous or sudden or unintended occurrence while handling any hazardous substance resulting in continuous or intermittent or repeated exposure to death of, or injury to, any person or damage to any property but does not include an accident by reason only of war or radio-activity;]

(b) “Collector” means the Collector having jurisdiction over the area in which the accident occurs;

(c) “handling”, in relation to any hazardous substance, means the manufacture, processing, treatment, package, storage, transportation by vehicle, use, collection, destruction, conversion, offering for sale, transfer or the like of such hazardous substance;

(d) “hazardous substance” means any substance or preparation which is defined as hazardous substance under the Environment (Protection) Act, 1986 (29 of 1986), and exceeding such quantity as may be specified, by notification, by the Central Government;

(e) “insurance” means insurance against liability under sub-section (1) of section 3;

(f) “notification” means a notification published in the Official Gazette;

(g) “owner” means a person who owns, or has control over handling, any hazardous substance at the time of accident and includes –

(i) in the case of a firm, any of its partners;

(ii) in the case of an association, any of its members; and

(iii) in the case of a company, any of its directors, managers, secretaries or other officers who is directly in charge of, and is responsible to, the company for the conduct of the business of the company;]

(h) “prescribed” means prescribed by rules made under this Act;

(ha) “Relief Fund” means the Environmental Relief Fund established under section 7A;]

(i) “rules” means rules made under this Act;

(j) “vehicle” means any mode of surface transport other than railways.


A product liability insurance is a policy which indemnifies the distributor, wholesaler and retailer against various losses or damages which could arise out of the consumption or use of products manufactured, sold or distributed by them.