INSURANCE

UNIT- 1

Introduction

 Insurance is a very significant part of our lives.

 It is what guards us, secures us, and even our loved ones from any sort of mishap. There
are many sorts of insurances available out there
 Life is uncertain; there are no guarantees or predictions about what will happen in one's
life.
 Similarly, businesses also don't have any guarantee as they face many unexpected losses
or damages in the long run.
 Assets like cars, bikes, etc. also don't have any certainty in their lifetime, they can get
stolen or damaged in the long run. One can fight all these risks with an insurance cover.
 Life Insurance is a contract whereby the insurer, in consideration of a certain premium
undertakes to pay a stipulated sum to the life assured or to the beneficiary upon the expiry
of a fixed period or death of the person, whose life is insured. Insurance is one of the
most important institutions of modern society.
 It gives economic security and stability to the lives of individuals, families, enterprises
and communities.

INSURANCE- DEFINITION
 Insurance is generally defined as a contract which is also called a policy.
 An insurance policy is a contract in which an individual or an organization gets financial
protection and compensation for any damages by the insurer of the insurance company.
In simpler words, one can answer what is an insurance policy as a form of protection
from any unexpected loss or damage. From this paragraph, one can get a clear overview
of insurance meaning.
 It is a form of contract or agreement which one party agrees in return of a consideration
to pay an agreed amount of money to another party to make good for a loss, damage,
injury to something of value in which the insured has to pay as a result of some uncertain
event. Thus, insurance is a method of securing protection against future calamities and
uncertainties.

What Insurance is?

Life Insurance is a contract whereby the insurer, in consideration of a certain premium
undertakes to pay a stipulated sum to the life assured or to the beneficiary upon the expiry of a
fixed period or death of the person, whose life is insured. Insurance is one of the most important
institutions of modern society. It gives economic security and stability to the lives of individuals,
families, enterprises and communities. It is said that every man must have three basic things to
survive - food, shelter and clothing.
 Next to these, one needs insurance. It is the one factor which protects and ensures continuity of
the first three. All insurance has four components:
 First of all there must be an asset which has economic value.
 Secondly the asset is exposed to the chance of loss [termed as risk] in its economic value
due to possible happening of an event, known as the risk event.
 Thirdly such economic losses that may be suffered by an unfortunate few are met from a
fund into which the contributions of many individuals, similarly, exposed to that risk are
pooled in. The chance of making a loss [the risk] thus gets transferred from the individual
to the pooled fund. Finally the arrangement for meeting such loss is made by an
institution called the insurer through a contract of insurance. In sum the four things
involved in insurance are: Asset, Risk, The Pooling principle and The Contract Asset:
The term asset signifies something that has economic value and so provides benefits to its
owner.
There are broadly three different kinds of assets.
 Property – One’s physical possessions that have economic value. Examples are house,
factory, inventory of goods and raw materials, vehicles, cash and valuables.
 Good will – One’s name, reputation and prestige that may be destroyed by an accident.
For example, a doctor whose patient dies at his hands may be held liable for the death and
may suffer loss of reputation and even have to pay damages.
 The Person: One’s personal self [Life and health] that may be affected by disease or
even death.

 FourthlyRisk: Risk has been defined as the chance of a loss. When we say chance, it
means that there is a probability between 0 and 1 that the loss may occur.

History of the insurance sector in India

Ancient times

The concept of insurance was loosely practised in ancient Indian society. It also finds mention in
some religious scriptures such as Dharmasastra and Arthasastra. The scriptures mention that
communities pool their resources and redistribute them when natural calamities hit them.

British rule

With the advent of the British, the concept of insurance in India changed. India had its first
British insurance firm with the establishment of the Orental Life Insurance Company in 1818,
which later failed in 1834. Subsequently, the British Insurance Act was enacted in 1870. Most of
the insurance companies in India were owned and operated by foreigners. In 1912, the
Government of India passed the first statute called Indian Life Assurance Companies Act, 1912.
For the first time, in 1914, the Government of India started to publish the returns of insurance
companies in India. And, in 1928, the Indian Insurance Companies Act was enacted,
empowering the government to collect data on the business of both Indian and foreign insurers.
In 1938, Insurance Act, 1938, was enacted, whose importance was diminished by subsequent
legislation.
Post-independence

In the 1950s, the Government of India started to nationalize the insurance sector of the country.
In 1956, the Life Insurance Corporation Act, 1956 was enacted which led to the establishment
of Life Insurance Corporation, popularly known by its abbreviation LIC, which has a monopoly
over the life insurance business in India. After the enactment of this Act, life insurance fell out of
the purview of the Insurance Act, 1938. In 1973, the General Insurance Business
(Nationalisation) Act, 1972 came into effect, nationalizing general insurance business.

Liberalization policy

In 1991, liberalization and privatization brought forth many changes in the Indian economy.
When the need to reopen the insurance sector to private parties arose, the central government set
up a committee headed by R.N. Malhotra, former governor of RBI, to examine the changes to be
made in the insurance sector. The eight-member committee recommended privatization of the
insurance sector and the establishment of the Insurance Development Regulatory Authority
(IRDA), an autonomous body to regulate the insurance sector. Finally, the monopoly of LIC over
the life insurance sector ended and the IRDA Act, 1999 was enacted.

PURPOSE OF INSURANCE

The following are the two main purposes of insurance contracts :

 Protection against uncertain events: The main purpose of an insurance contract is to

make the insured person secure and financially protected from certain uncertain
contingencies that would cause a huge financial burden.
 Better management of finances: Many people have the tendency to make poor financial
decisions that could potentially leave them without any support when faced with an
unfortunate situation. By subscribing to an insurance policy, the insured would be able to
make better financial decisions.

BASIC FUNCTIONS OF INSURANCE

It is important to understand that an insurance policy has both a financial and an emotional aspect for the
policyholder. There are certain functions that an insurance company must promise to take care of while
they are finalising the contract with the insured party. We will attempt to explain those functions below:

 To provide safety and security to the insured – One of the prime reasons for entering
into an insurance contract is to seek financial security in the event of a loss from an
unexpected occurrence. Insurance offers support to the policyholder and helps to reduce
the uncertainties in the business or in human lives. With the help of a policy, the insured
 party is protected against future hazards, vulnerabilities and accidents. Although no
insurer in the world can prevent the dangerous event from occurring, they can certainly
help by providing some sort of financial protection to compensate the insured party.
 Protection for your loved ones – Medical insurance can help you and your family get
the right sort of treatment and cover hospitalisation expenses. It helps to take care of their
health in case of an accident, illness or any other unfortunate event. The well being of
your family comes before anything, and insurance helps take care of that in the best
possible manner.
 Collective Risks – Another function of an insurance contract is that it helps a number of
individuals get an insurance policy to safeguard themselves from the losses that may
occur due to an unfortunate event. This strategy works on the principle that not all of the
policyholders for a particular risk will face it at the same time. For example, if a total of
fifty thousand people are insured against damage to their cars due to accidents, the most
likely scenario is that only a few of them would have accidents in a single year. So the
amount that they can claim from the insurance company for the financial losses due to the
accidents would be adequately covered by the insurance premiums from all fifty thousand
policyholders.
 Risk Assessment – Insurance organisations play an important role in determining the
actual amount of risk from the occurrence of a particular event by assessing the situation.
They analyse all the aspects of a risk carefully to make an informed decision. It helps
them to arrive at the final insurance amount as well as fix the premium to be paid by the
insured.
 Certainty – One of the main benefits of taking a policy for the insured is that they can
feel secure about meeting the future losses after taking coverage for a particular risk. It
can be very reassuring for the insured party and can also help them to proceed with their
daily activities in a much more assured manner without fear or hesitation.
 It helps to forestall losses – An insurance contract can help the insured to mitigate their
losses by providing some sort of security in case of an unforeseen event. It helps
businesses have a contingency plan in case things do not go as planned. Insurance is a
very important tool for organisations as it allows them to cover their bases while
operating in a very risky environment where the losses can be huge if they do not play
their cards right. It also allows them to be able to cover these huge risks in their
businesses by paying a relatively small amount as the premium.
 Fulfil the legal requirements – In some countries, any business is required to have
certain insurance covers in order to engage in any economic activity. So the insurance
company can help organisations fulfil these requirements.
 It allows the development of big businesses – Any large-sized organisation is exposed
to a greater amount of risk. If the chances of loss are relatively higher, it may prevent the
management in those organisations from taking calculated risks, which has the potential
of bringing more profits. Insurance helps to mitigate that risk in a way and encourage
 businesses to take bold decisions. Insurance takes away some of the financial pressures
and allows businesses to flourish in the long run.
 It can help in boosting the economy – When the businesses have sufficient insurance
cover, they can increase their scope of economic activity that will bring commensurate
rewards. This can provide an impetus to the overall economy of a country in the long run.

OBJECTIVES OF INSURANCE

 Granting Security- To People Insurance primarily serves the purpose of granting

security against losses and damages to people. It is an agreement enters into by two
parties in which one promises to protect other from losses in return for premium paid by
other party. One party is insurance company and other one is insured
 Minimisation Of Losses- Insurance aims at minimisation of losses arising from future
risks and uncertainties. It adds certainty of payments to people for happening of uncertain
events. Insurance assures the individuals for compensation of losses. It minimises the risk
through proper planning and administration.
 Diversifying The Risk- Insurance works towards diversifying the risk among large
number of people. It aims at reducing the adverse effects of any future contingency by
spreading the overall risk associated with it. It is medium through which people share
their risk with others. Insurance companies compensate the insured for losses out of
premium they charged from their different policy holders
 The Anxiety And Fear Insurance policies relieves the individuals of any tension and
fear regarding the future risks and uncertainties. It guarantees them of compensation in
occurrence of any unfavourable contingencies. Assurance of compensation is the most
relieving factor for tensed and worried people. They are certain of payment on occurrence
of various uncertain events. It makes them confident and they focus on their activities
with full attention. Mobilises The Saving Mobilisation of savings is another important
objective of insurance. It attracts people for investments by presenting them with
numerous insurance policies guarantying of compensation for losses. Large number of
people takes this insurance policy in order to insure them against losses and damages.
 Generation Of Capital Insurance companies leads to capital generation by collecting
large amount of funds from public. They regularly charges premium from their large
customers for providing them protection against losses. These funds are invested for
industrial development by subscribing to shares of companies..

IMPORTANCE OF INSURANCE

1. Provide safety and security: Insurance provide financial support and reduce uncertainties in
business and human life. It provides safety and security against particular event. There is always
a fear of sudden loss. Insurance provides a cover against any sudden loss.
2. Generates financial resources: Insurance generate funds by collecting premium. These funds
are invested in government securities and stock. These funds are gainfully employed in industrial
development of a country for generating more funds and utilised for the economic development
of the country.

3. Life insurance encourages savings: Insurance does not only protect against risks and
uncertainties, but also provides an investment channel too. Life insurance enables systematic
savings due to payment of regular premium. Life insurance provides a mode of investment. It
develops a habit of saving money by paying premium

4. Promotes economic growth: Insurance generates significant impact on the economy by

mobilizing domestic savings. Insurance turn accumulated capital into productive investments.
Insurance enables to mitigate loss, financial stability and promotes trade and commerce activities
those results into economic growth and development.

5. Medical support: A medical insurance considered essential in managing risk in health. Anyone
can be a victim of critical illness unexpectedly. And rising medical expense is of great concern.
Medical Insurance is one of the insurance policies that cater for different type of health risks.

6. Spreading of risk: Insurance facilitates spreading of risk from the insured to the insurer. The
basic principle of insurance is to spread risk among a large number of people. A large number of
persons get insurance policies and pay premium to the insurer.

7. Source of collecting funds: Large funds are collected by the way of premium. These funds are
utilised in the industrial development of a country, which accelerates the economic growth.
Employment opportunities are increased by such big investments. Thus, insurance has become
an important source of capital formation.

PRINCIPLES OF INSURANCE
The concept of insurance is risk distribution among a group of people. Hence, cooperation becomes the basic
principle of insurance.

1. Utmost Good Faith

2. Proximate Cause
3. Insurable Interest
4. Indemnity
5. Subrogation
6. Contribution
7. Loss Minimization

Principle of Utmost Good Faith

The fundamental principle is that both the parties in an insurance contract should act in good faith towards each
other, i.e. they must provide clear and concise information related to the terms and conditions of the contract.
The Insured should provide all the information related to the subject matter, and the insurer must give precise details
regarding the contract.

Principle of Proximate Cause

This is also called the principle of ‘Causa Proxima’ or the nearest cause. This principle applies when the loss is the
result of two or more causes. The insurance company will find the nearest cause of loss to the property. If the
proximate cause is the one in which the property is insured, then the company must pay compensation. If it is not a
cause the property is insured against, then no payment will be made by the insured.

Principle of Insurable interest

This principle says that the individual (insured) must have an insurable interest in the subject matter. Insurable
interest means that the subject matter for which the individual enters the insurance contract must provide some
financial gain to the insured and also lead to a financial loss if there is any damage, destruction or loss.

Example – the owner of a vegetable cart has an insurable interest in the cart because he is earning money from it.
However, if he sells the cart, he will no longer have an insurable interest in it.

To claim the amount of insurance, the insured must be the owner of the subject matter both at the time of entering the
contract and at the time of the accident.

Principle of Indemnity

This principle says that insurance is done only for the coverage of the loss; hence insured should not make any profit
from the insurance contract. In other words, the insured should be compensated the amount equal to the actual loss
and not the amount exceeding the loss. The purpose of the indemnity principle is to set back the insured at the same
financial position as he was before the loss occurred. Principle of indemnity is observed strictly for property insurance
and not applicable for the life insurance contract.

Example – The owner of a commercial building enters an insurance contract to recover the costs for any loss or
damage in future. If the building sustains structural damages from fire, then the insurer will indemnify the owner for
the costs to repair the building by way of reimbursing the owner for the exact amount spent on repair or by
reconstructing the damaged areas using its own authorized contractors.

Principle of Subrogation

Subrogation means one party stands in for another. As per this principle, after the insured, i.e. the individual has been
compensated for the incurred loss to him on the subject matter that was insured, the rights of the ownership of that
property goes to the insurer, i.e. the company.Subrogation gives the right to the insurance company to claim the
amount of loss from the third-party responsible for the same.

Principle of Contribution

Contribution principle applies when the insured takes more than one insurance policy for the same subject matter. It
states the same thing as in the principle of indemnity, i.e. the insured cannot make a profit by claiming the loss of one
subject matter from different policies or companies..

Principle of Loss Minimisation

This principle says that as an owner, it is obligatory on the part of the insurer to take necessary steps to minimise the
loss to the insured property. The principle does not allow the owner to be irresponsible or negligent just because the
subject matter is insured.

The types of Insurance that will be discussed are:

1. Life Insurance

2. General Insurance (which includes fire insurance, health insurance and marine insurance)

Let us discuss these types in detail.

1. Life Insurance:
Life insurance is a type of insurance policy in which the insurance company undertakes the task of insuring the life of
the policyholder for a premium that is paid on a daily/monthly/quarterly/yearly basis.Life Insurance policy is regarded
as a protection against the uncertainties of life. It may be defined as a contract between the insurer and insured in
which the insurer agrees to pay the insured a sum of money in the case of cessation of life of the individual (insured)
or after the end of the policy term.For availing life insurance policy the person needs to provide some details like age,
medical history and any type of smoking or drinking habits.

Some of the types of life insurance policies that are prevalent in the market are:

a. Whole life policy: As the name suggests, in this kind of policy the amount that is insured will only be paid out to
the person who is nominated and it is only payable on the death of the insured.-Some insurance policies have the
requirement that premium should be paid for the whole life while others may be restricted to payment for 20 or 30
years.

b. Endowment life insurance policy: In this type of policy the insurer undertakes to pay a fixed sum to the insured
once the required number of years are completed or there is death of the insured.

c. Joint life policy: It is that type of policy where the life insurance is availed by two persons, the premium for such a
policy is paid either jointly or by each individual in the form of installments or a lump sum amount.In the case of such
a policy the assured sum is provided to both or any one of the survivors upon the death of any policyholder. These
types of policy are taken mostly by husband and wife or between two partners in a business firm.

d. Annuity policy: Under this policy, the sum assured or the policy money is paid to the insured on a
monthly/quarterly/half-yearly or annual payments. The payments are made only after the insured attains a particular
age as dictated by the policy document.

e. Children’s Endowment policy: Children’s endowment policy is taken by any individual who wants to make sure
to meet the expenses necessary for children’s education or for their marriage. Under this policy, the insurer will be
paying a certain sum of money to the children who have attained a certain age as mentioned in the policy agreement.

2. General Insurance:
General Insurance is related to all other aspects of human life apart from the life aspect and it includes health
insurance, motor insurance, fire insurance, marine insurance and other types of insurance such as cattle insurance,
sport insurance, crop insurance, etc.

We will be discussing the various types of general insurances in the following lines.
a. Fire Insurance: Fire insurance is a type of general insurance policy where the insurer helps in paying off for any
damage that is caused to the insured by an accidental fire till the specified period of time, as mentioned in the
insurance policy.

Generally, fire insurance policy is valid for a period of one year and it can be renewed each year by paying a
premium, which can be a lump sum or in installments.

The claim for a fire loss must satisfy the following conditions:

i. It should be an actual loss

ii. The fire must be accidental and not done intentionally

b. Marine Insurance: Marine insurance is a contract between the insured and the insurer. In marine insurance, the
protection is provided against the perils of the sea. The instances of dangers in sea can be collision of ship with rocks
present in sea, attacking of the ship by pirates, fire in ship.

Marine insurance covers three different types of insurance which are ship hull, cargo and freight insurance.

 Ship or hull insurance: As the ship is exposed to many dangers at the sea, the insurance covers for losses
caused by damage to the ship.
 Cargo Insurance: The ship carrying cargo is subjected to many risks which can be theft of cargo, lost
goods at port or during the voyage. Therefore, insuring the cargo is essential to cover for such losses.
 Freight Insurance: In the event of cargo not reaching the destination due to any kind of loss or damage
during transit, the shipping company does not get paid for the freight charges. Freight insurance helps in
reimbursing the loss of freight caused due to such events.

Marine insurance is a contract of indemnity where the insured can recover the cost of actual loss from the insurer in
event of any loss occurring to the insured item.

c. Health Insurance: Health insurance is an effective safeguard for protection against rising healthcare costs. Health
insurance is a contract that is made between an insurer and an individual or a group where the insurer agrees to
provide health insurance against certain types of illnesses to the insured individual or individuals.The premium can be
paid in installments or as a lump sum amount and health insurance policy is renewed every year by paying the
premium.The health insurance claims can be done either directly in cashless or reimbursement availed after
treatment is done. Health insurance is available in the form of Mediclaim policy in India.

d. Motor vehicle insurance: Motor vehicle insurance is a popular option for the owners of motor vehicles. Here the
owners’ liability to compensate individuals killed by negligence of motorists is borne by the insurance company.

e. Cattle Insurance: In case of cattle insurance, the owner of the cattle receives an amount in the event of death of
the cattle due to accident, disease or during pregnancy.

f. Crop Insurance: Crop insurance is a contract for providing financial support to the farmers in the event of crop
failure due to drought or flood.

g. Burglary Insurance: Burglary insurance comes under the insurance of property. Here the insured is compensated
in the event of a burglary for the loss of goods, damage occurred to household goods and personal effects due to
burglary, larceny or theft.

Public Liability Insurance Act, 1991

Introduction
 The 1991 Public Liability Law regulates mandatory liability insurance.
 Under the law, companies must commit to installing and handling hazardous materials
that have been reported under the Environmental Protection Act, 1986.
 It is basically a part of tort law, which focuses on the misconduct of civil law.
 The applicant (the injured party) usually sues the accused (owner or convict) according to
general law due to negligence and/or damage.
 Claims are generally successful if it can be proven that the owner/occupant is responsible
for the injury and therefore violating his maintenance obligations.
 Once a due diligence violation has been identified, a lawsuit in a court may succeed.
 The court will provide financial compensation based on the applicant’s injury and loss.
 As the rate of such dangerous industries grow it is a threat not only to the employees or
the workers but also the people near.

BASICS ABOUT THE LAW

 The Public Liability Insurance Act of 1991 deals with hazardous substances; each
owner must conclude one or more contracts which include the obligation to provide
direct compensation. It should be provided to all those who have suffered damages that
should be given to the property of the deceased legal heir in the event of their death.
 The 1991 Public Liability Act was ordained to provide direct assistance to people
affected by accidents related to handling hazardous materials and other coerced and
related matters. Coverage insurance is claimed when someone is injured at the place of
business. Places like shopping centres, night clubs, and theatres need this type of
insurance to protect themselves.
 The Public Liability Insurance Act 1991 applies to all owners associated with the
production or handling of any hazardous chemicals, to provide immediate relief to
victims and persons (other than workmen) affected by accidents occurring while
handling hazardous substances through the insurance amount paid by the owner of the
hazardous substance. Coverage insurance covers claims by community members who
have suffered injury or property damage in connection with the business. Coverage
insurance covers a person or company in the event of an accident at their company.
A major reason for the enactment of this law

Bhopal Gas TragedyUnion Carbide Corporation vs Union Of India Etc on 4 May 1989

It is also known as the Bhopal disaster, in which thousands of people lost their lives. This is
considered the worst industrial disaster in the world that happened on a cold winter night in the
early hours of December 3, 1984. Around midnight, a chemical reaction began at the Union
Carbide (India) Limited plant, which resulted in the release of a deadly gas methyl isocyanate
(MIC) from one of the tanks. As a result, the gas cloud gradually tumbled enveloping the city
within its deadly folds. Both the city and the lake had become a gas chamber. Nearly 3,000
people died in the tragedy, and thousand more were physically injured and affected in various
forms.

Wildlife was killed, injured, and contaminated. The business was totally cut off. People’s lives
were affected. The environment was polluted disturbed ecology and wildlife. An estimated 40
tons of methyl isocyanate (MIC) gas leaked from the Union Carbide Factory. Lessons learned
from the Bhopal gas tragedy were quickly forgotten.

The Public Liability Insurance Act 1991 came into force after the tragedy and aims to provide
immediate assistance to victims of accidents involving hazardous industries. However, activists
argue that legal provisions are not enforced by collectors appointed as law enforcement agencies.
According to Section 4 of the law, owners of companies that use hazardous substances take out
insurance policies to cover liabilities from accidents that cause death, injury, or injury. In
addition, Section 7 A, i) and (ii) regulate the establishment of a central government
environmental promotion fund to be used in accordance with the law to pay assistance to
accident victims in dangerous companies. The law also regulates business owners to take
insurance policies that cover obligations not less than the paid-up capital of the business and not
more than Rs 50 crore. In Bhopal leak gas case MIC leaked from the plant of union carbide India
Ltd, which caused the death of 3000 persons and serious injuries to a large number of people.

The government of India responded with a number of concrete legislative measures:-

 Environment Protection Act, 1986– this expands the central government powers to
enter, inspect, and close down facilities that are formerly under inadequate supervision.

 The Factories Act, 1987, and the Hazardous Wastes Act, 1989 imposed various
responsibilities on industries.
  The innovative public liability insurance act 1991: this required factory owners to ensure
against potential personal injury and property damage in surrounding communities.

Key Objectives of the Act

The Public Liability Insurance Act 1991 serves several critical objectives,
including:
a. Protecting the Public: The act aims to safeguard the interests of the public by holding
businesses accountable for any harm caused due to their activities. It ensures that victims receive
compensation promptly and efficiently.

b. Encouraging Responsible Business Practices: By mandating public liability insurance, the

act promotes responsible behavior among businesses dealing with hazardous substances. It
encourages them to implement necessary safety measures, reducing the risk of accidents and
damage to the public.

c. Streamlining Compensation Claims: The act establishes a framework for making

compensation claims more accessible and efficient. It helps expedite the settlement process,
ensuring that victims receive timely compensation for their losses.

Major provisions made in the Public Liability Insurance Act

Following are some of the relevant provisions of this Act:

Defined as:

An accident is a sudden or unexpected incident, which is related to a hazardous substance that

causes continuous or temporary exposure or injury to a person but does not result in an accident
that is solely caused by war or war radioactivity.

To deal with hazardous substances is to manage the production, handling, packaging, storage,
transportation of vehicles, use, collecting, destructing conversion, making offers for sale,
removal from such hazardous substances Insurance – is liability insurance in accordance with
subsection 3 of Section 1.

The owner is the one who controls and handles hazardous substances at the time of the accident:

 Partners, in the case of a company

 Any member, in case of an association

prescribed are the rules made in this act, relief fund is the environmental relief fund established
under Section 7A.

The relief provided under this act

Compensation for liability in certain cases without error

 As in Section 3 If the death or injury of another person (other than a worker) or property
damage due to an accident has occurred, the owner is obliged to provide the assistance
listed on the list for the death, injury, or damage.

 In a claim for compensation under Section 1 (hereinafter referred to as this law as

compensation), the plaintiff does not need to declare and prove that the death, injury, or
damage on which the claim was based on an action, neglecting or not showing one’s
performance.

Establishment of environmental relief fund

 The Central Government can establish a fund known as the Environmental Assistance
Fund through notification.

 Relief funds are used for payments in accordance with the provisions of this Law and
regulations under Section 3 relief in the case of assignments by collectors in accordance
with Section 7.

 The Central Government can, through notification, establish a system that determines the
location where the support funds are located, the way in which the support funds are
managed, the form and the manner in which money from support is placed is removed.
Funds and for all other matters relating to or in connection with managing the support
and payment of benefits there.

Provisions as to claim to other rights for compensation for death etc

The right to claim compensation under Section 3 subsection 1 for death or injury to a person or
damage to property has, in addition to other rights, for compensation in connection with other
laws currently in force.

There is no prejudice as in the provisions, the owner, who is required to apply for help, is also
required to pay compensation for someone’s death or injury or damage to the property. This
amount of compensation is reduced by the number of concessions paid under this law.
Application for a claim for relief

An application for a claim for relief may be made as according to Section 6(1));

 by the person who has sustained the injury;

 by the owner of the property to which the damage has been caused;

 where death has resulted from the accident, by all or any of the legal representatives of
the deceased; or

 by any agent duly authorized by such person or owner of such property or all or any of
the legal representatives of the deceased, as the case may be:

Award of relief

After receiving an application in accordance with Section 1, the collector, having notified to the
owner’s request, given the parties an opportunity to be heard will examine the request or one of
the claims and can give a gift to Give a level of relief which he thinks is fair and show the person
or person to whom this compensation will be paid.

Collectors must arrange delivery of copies of prices to interested parties quickly and in any case
within fifteen days from the date of the assignment.

If you give a gift according to this section,

1. The Insurer, which is required to pay the amount for the assignment to the extent
specified in Section 4, sub-section(2B) within thirty days from the date of notification of
the assignment, the amount of the deposit in a way that the collector can control.

2. The collector must arrange a grant for this grant and in accordance with the system set
out in Section 7A, to pay the person referred to in paragraph 1 or the person specified in
paragraph 1 the amount that can be arranged in this system.

3. The owner must deposit an amount that can be instructed by the collector in this period.]

Penalties
Penalty for contravention of subsection (1) or sub-section (2) of section 4 or failure to comply
with directions under section 12

Anyone who violates any of the provisions of Section 4 (1) [1 or section 2 or Section 2A Section
2C] or violates instructions issued in accordance with Section 12, will be punished with
deprivation of liberty for a period of time which may not be less than one year and six months,
but until it may take six years or a fine that may not be less than one rupee or both.

Anyone who has been convicted of an offence under section 1, after the second offence has been
convicted of a second offence or another offence, will be sentenced to a prison sentence of at
least two years, which in any case can last up to seven years and with a fine of not less than a
lacquer rupee.

Nothing listed in Part 360 of the 1973 Criminal Procedure Code (2 of 1974) or the 1958 Criminal
Law (20 of 1958) does not apply to someone convicted of a violation under this Act unless the
person is under the age 18 years.