Group Member Name

Irfan Rahim Mi18MBA002

Arslan Ali Mi18MBA008
Hamza Ahsan Mi18MBA009
Amjad Ali Mi18MBA015
Awais Tariq Mi18MBA046
Waqar Javed Mi18MBA053
Faizan Arshad Spal Mi18MBA062
Public Liability Insurance
 Introduction
PUBLIC LIABILITY INSURANCE IS INSURANCE
THAT PROTECTS A BUSINESS FROM COSTS FOR
LAWSUITS BROUGHT BY MEMBERS OF THE
PUBLIC.

THE PUBLIC LIABILITY INSURANCE ACT 1991,

PROVIDES FOR MANDATORY PUBLIC LIABILITY
INSURANCE. UNDER THE ACT, COMPANIES NEED
TO TAKE FOR INSTALLING, HANDLING ANY
HAZARDOUS SUBSTANCE NOTIFIED UNDER THE
ENVIRONMENT PROTECTION ACT.
 Examples
If your business interacts with customers and the general public, you
need insurance to help cover some of those risks.
For example:
 A client comes into your office, sits in one of your chairs, and the
chair collapses.
 Someone walks by your office and is injured when your sign falls on
them.
 A member of the public is injured at an event your business
sponsors.
Objectives of PLI
Under Public Liability Insurance Act 1991, every owner, before
starting to handle any hazardous substance, have to take out one or
more policies covering liabilities for providing,

1. immediate relief to the persons affected by accidents, occurring

while handling any hazardous substance and for other incidental
and connected matters.
2. immediate relief on a specified scale to any person suffering
damage to property
 Types of PLI

 PLI Industrial risk, this is meant for manufacturing units and ware houses.
 PLI Non Industrial Risk, it is meant for any non manufacturing units, like
hospitals, retail outlets, schools etc.
 PLI under Public Liability act. The environment protection Act 1986 and public
liability insurance act 1991 make it compulsory for the business dealing in a
hazardous environment to take suitable insurance.
 Scope of PLI
The claims related to public liability are less predictable and may arise out of any
unfortunate events, many a times not directly linked to the business operations. Most
common coverages are:
1. Claims arising out of the accident, injury or damage on your business premises
or arising out of events in connections with your business
2. The Act of God events
3. Legal liability
4. Transportation hazards
5. Pollution and contamination
 Functioning of PLI

Public liability insurance is not a must for most of the business operations. However,
it is legally compulsory only for businesses that operate in a hazardous environment
or are exposed to similar business operations.
• Evaluate the risks associated with your business and the kind of loss
you would face because of these risks
• Compare and check different companies and policies before finalising
a plan
• Approach the insurance provider you have decided and then go ahead
with the required documentation work
• In case of a need of any claim, inform the company immediately
 Functioning of PLI

• Submit the dully filled in claim form along with the required
documents
• A surveyor from the company will assess the problem and then
prepare the report accordingly
• If you are eligible for the claim, you will get it within the specified time
frame else will be informed about the rejection
• In case you are not satisfied with the decision, you can approach a
court of law
 Eligibility Criteria for PLI

The insurance premium and the other details depend on the type of business and the
associated risks. Entities who are eligible for public liability insurance are:
 Manufacturing units
 Other entities like IT companies, BPOs, hotels, schools, restaurants and clubs
 Units dealing with hazardous substances under Public Liability Act, 1991
 Why Does a Business Need It

Business usually comes into contact with the general public on a regular basis, public
liability insurance might be a good idea. Your work or your workplace could cause
injury or damage to someone:
 If customers visit your business regularly—as with a retail shop or restaurant
 If you work at client businesses or homes—as a contractor
 If you work in public—like as an entertainer or a builder
 What Does PLI Cover
Public Liability Insurance covers the costs of defending business during a lawsuit
and payments of claims by a member of the public.
 Bodily Injury PLI protects against the risk of someone being injured on your
business property. The coverage usually includes areas outside the property, like
walkways and parking lots.
 Property damage coverage includes protection of the business from damage to
someone else's property while they are on that property or while you are doing
work. For example, if a carpenter is working on a customer's home and breaks a
window, that damage would be covered.
 Legal expenses cover the cost of hiring and paying an attorney to represent your
business in a lawsuit brought by a customer or someone else is covered by a PLI
policy.
 Exclusions of PLI
Public Liability Insurance does not cover everything. That is why it is important to
read and understand any PLI policy you have.
a) It does not cover accidents that happen to you as the business owner during the
course of your business activities. You will need your own personal insurance
or general liability insurance if you want this coverage.
b) accidents or injuries to your employees while they are working for you, at your
business location, or elsewhere, including driving for business purposes are not
covered. Coverage for employee accidents and injuries is covered by worker's
compensation insurance that all employers are required to have.
 Exclusions of PLI
c) Coverage does not extend to the costs to defend defamation charges (libel or
slander) against you or your business. This type of coverage also includes false
statements made by company executives or by the company (in advertising
materials, for example). However, this insurance is included in general liability
coverage.
d) PLI does not cover the costs for professional liability lawsuits sometimes called
errors and admissions or malpractice. These lawsuits are brought against
professionals for their actions in a professional capacity, including doctors,
CPAs, architects, and others. Professionals need malpractice insurance to cover
them against these claims.
 Exclusions of PLI

 Any unlawful activity.

 Any deliberate act to cause damage or injury.
 Personal injury to employee and employer.
 Property damages suffered by employee or employer.
 Compulsion of PLI in Business
In general, there is no law requiring PLI coverage. But Business may
be required to get this insurance in some situations. These include:
1. If you are applying for a business loan, especially if there is an
SBA loan guarantee, your lender may require insurance to protect
itself for you going out of business because of a claim.
 Compulsion of PLI in Business
3. If you are leasing property, your landlord or the property
management company may require property and casualty
insurance.
4. If you are holding an event open to the general public on public
property, you will need a permit. The permit may require you to get
some type of public liability insurance.
Public Liability Insurance Claim Process

The process by which claims are made are:

 Evaluate and analyze the loss and damage you have encountered
 Inform the insurance company as soon as possible; this should be
done in writing
Public Liability Insurance Claim Process

 Collect the evidence and proof

 Apt medical certificates in case of injury or death
 Submit duly filled in claim form along with the required documents
 An assessor will evaluate the case and decide whether to accept or
reject the claim
 In case you are not satisfied with the decision, you can approach the
court
Documents Required for Claim Process

To get claims under public liability insurance, following documents are needed to
make the claims:

a) Duly filled in claim form along with the required documents

b) Medical certificates in case of injury or death
c) Copies of evidence and proof
 Duties

Application for Relief

Establishment of Relief Fund
Power to Call for Information
Entry and Inspection
Power to give directions
Offences and Penalties
 Application for Relief
Under the Public Liability Insurance Act an
application for relief made by the applicant to the
Collector within 5 years of the accident.
Establishment of Relief Fund
Public Liability Insurance Act, empowers the
Central Government to establish Environment
Relief Fund, by notification in the official Gazette
 Power to Call for Information
Public Liability Insurance Act  deals with the powers to call for
information. The owner of hazardous installation becomes
obligated to submit to a person authorized by the Central
Government
Entry and Inspection
Public Liability Insurance Act  deals with entry, inspection,
search and seizure of such information the inspector reasonably
needs for the purpose of ascertaining, any requirements, rule or
directions made under this Act, require compilation.
 Power to give directions
Public Liability Insurance Act 1991 empowers the Central
Government to issue directions in writing to any owner,
officer,  or agency. The directions also include the prohibition
or regulation of handling hazardous substances.
Offences and Penalties
Punishable with an imprisonment for a minimum period of
one year and six months but which may extend to six years,
or with fine, which shall not be less than one lakh rupees or
with both.
Advantages of Buying PLI

Looking at various levels of risks involved with various kinds of business, it makes
sense to purchase a public liability insurance. Some of the advantages of this
insurance are:

I. It will cover for any kind of accident the public faces because of your business
II. It will cover any damage to public property caused due to your business
III. It will let you continue with your work without any hindrance in spite of liability
issues
IV. It will help get coverage for legal fees, in case you need to go to the court for
some liability case
 Coverage Provided by PLI

Claimant Cost
Defense Cost
Damages provided by the Court
 Case One:- Furniture fitter
One of policyholders is a furniture fitter who had to
claim on his public liability insurance while working on
a new-build house.
A cabinet he had installed fell of the wall and knocked
a fellow contractor off a step ladder, causing injury to
the contractor's wrist and back.
The claim was settled at £25,235, but the furniture fitter
only had to pay the excess of his policy, which was
£250.
 Case Two:- Welder
Another customer of is a welder who had a
claim made against him after he welded a
silencer at a food manufacturing company.
Unfortunately, some months later the silencer
failed and debris and grime were leaked into the
food being produced.
While the claim ran to £146,000, the welder only
paid his £250 excess.
 Case Three: Plumber
Our third example is a plumber who got himself
into hot water after he was contracted to fit a new
bathroom.
A plastic push fitting he had installed failed,
causing water to leak through the property for
around 12 hours, affecting neighboring houses as
well.
In this case the claim was settled for £160,000, of
which the plumber only paid £500.
 Conclusion
In many countries, Public Liability Insurance is
considered as Compulsory Insurance but in Pakistan
there is no trend of Public Liability Insurance.
People don’t take interest in taking Public Liability
Insurance. Government of Pakistan should take
necessary steps to make awareness about Public
Liability Insurance. Every year million of people
suffers due to not taking Public Liability Insurance.