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Importance of the Public Liability Insurance Act 1991

The public liability insurance act 1991 was ordained to offer immediate aid to the people affected by accidents caused by any hazardous substance or incidents. In the event of the death of any person working in a company dealing with hazardous substances, direct compensation is to be given to their legal heir. However, not many people understand the full extent of this act.

This article will explore the public liability insurance act 1991 to understand its scope better.

Major Objective of the Public Liability Insurance Act 1991

The major objective of the public liability insurance act 1991 is to provide immediate relief to the injured people and victims affected by the mishaps that take place while dealing with dangerous chemicals and substances. The act is applicable to the owners of factories or industries that deal with or produce hazardous chemicals and other substances.

With the rise in industries that deal with fatal substances, the potential danger to an employee has increased. The accidents that occur due to such industries may lead to fatal injury or death of the workers as well as other people residing in the vicinity.

Various places, such as factories, malls, night clubs, etc., should avail of the coverage provided by this act to be secured against legal liabilities of any fatal incident. The public liability insurance act 1991 also covers claims for the family members of the deceased.

Reasons for Enacting the Public Liability Insurance Act 1991

One of the major reasons for legislating this act is the Bhopal Gas Tragedy. On the 3rd of December, 1984, at midnight, a chemical reaction took place at Union Carbide (India) Limited plan. This resulted in the release of a harmful gas, methyl isocyanate (MIC), from a tank within the plant.
The gas formed a cloud over the city and turned both the city and the lake into a gas chamber. Nearly 3,000 people died due to this catastrophe, and there were thousands of people who were found physically injured and hurt in various ways.

This act came into use even during the Vizag Gas Leak. In this tragedy, about 13 people were found dead because of respiratory problems caused by a chemical leak from LG Polymers India Limited. Up to Rs. 5 crores under the Public Liability Act policy was utilized to compensate the victims.

The public liability insurance act 1991 came into effect after the Bhopal Gas Tragedy to give prompt assistance to those gravely affected by the tragedy caused by dangerous industries. It helps regulate the power to request information, entry, inspection, search, and seizure. But above all, those working in industries prone to chemical accidents are protected through this Social Welfare Law.

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