LIABILITY INSURANCE

1. LIABILITY INSURANCE

2. HISTORICAL BACKGROUND • PUBLIC LIABILITY INSURANCE ORIGINATED IN THE U.K. WHEN THE FIRST POLICY WAS ISSUED IN 1875 TO COVER T.P. LIABILITY ARISING OUT OF THE USE OF HORSE DRIVEN CARRIAGES • EMPLOYER’S LIABILITY INSURANCE WAS A RESULT OF THE EMPLOYERS’ LIABILITY ACT,1880 AND W.C.ACT, 1897 • PRODUCT LIABILITY AND PRFESSIONAL INDEMNITY ORIGINATED IN THE EARLY 20th CENTURY • IN INDIA,W.C.ACT--1923 AND M.V.ACT--1939 PAVED THE WAY FOR LIABILITY INSURANCE • THE BHOPAL GAS TRAGEDY IN 1984 LED TO THE ENACTMENT OF THE ENVIRONMENT PROTECTION ACT,1986 AND PUBLIC LIABILITY INSURANCE ACT ,1991 • OTHER IMPORTANT STATUTES WHICH HAVE A BEARING ON THIS LINE OF BUSINESS ARE— • CONSUMER PROTECTION ACT ,1986 • EMPLOYEES’ STATE INSURANCE ACT ,1948,which resulted in the formation of the Employers’ State Insurance Corporation

3. CLASSIFICATION OF LEGAL LIABILITY • CRIMINAL LIABILITY—IS ENFORCED BY THE STATE,RESULTING IN PUNISHMENT IN THE FORM OF FINE OR IMPRISONMENT • CIVIL LIABILITY--- ACTION IS BROUGHT BY ONE PARTY AGAINST ANOTHER FOR A CIVIL WRONG RESULTING IN PAYMENT OF DAMAGES/COMPESATION TO THE AGGRIEVED PARTY • NOTE– Insurance coverage is provided only for Civil Liability Claims • CIVIL LIABILITY may arise under --- • Common Law • Statute • Contract • PURPOSE OF LIABILITY INSURANCE IS TO PROVIDE INDEMNITY TO THE INSURED IN RESPECT OF FINANCIAL CONSEQUENCE OF LEGAL LIABILITIES • TWO METHODS OF CLASSIFICATION--- • STATUTORY LIABILITY AND TORT LIABILITY • PROPERTY AND CASUALTY LIABILITY(negligence results in TPPD/TPPI) AND FINANCIAL LIABILITY ( negligence results in financial loss to Third Parties)

4. LEGAL BACKGROUND • TORT—MEANS A CIVIL WRONG ARISING OUT OF A BREACH OF SOME DUTY WHICH LEADS TO A CIVIL CAUSE OF ACTION AND FOR WHICH DAMAGES/ COMPENSATION ARE RECOVERABLE • Examples of TORT are— • Libel— false statement in written/published form designed to damage the reputation of another person • Slander-- false statement in verbal form designed to damage the reputation of another person • Assault– unlawfully perpetrating Bodily Harm to another person • SEQUENCE----INSURED OWES DUTY OF CARETHERE IS A BREACH OF THIS DUTY RESULTING IN INJURY TO T/P AND/OR T/P PROPERTY DAMAGE --> CLAIM FOR DAMAGES • PUBLIC LIABILITY IS CONCERNED WITH TWO MAJOR TORTS— • NEGLIGENCE=ABSENCE OF CARE • NUISANCE(PRIVATE)= CONDUCT WHICH UNLAWFULLY INTERFERES WITH ANOTHER PERSON’ S USE OR ENJOYMENT OF RIGHTS OR CAUSES TPPI/D AND TPPD

5. BASIC PRINCIPLES • POLICY WILL INDEMNIFY THE INSURED TO THE EXTENT OF THE AWARD AMOUNT PLUS CLAIMENT’S COST PLUS DEFENCE COSTS ------- SUBJECT TO THE LIMIT OF LIABILITY UNDER THE POLICY • LIMITS OF INDEMNITY- • AOA=ANY ONE ACCIDENT • AOY=ANY ONE YEAR • PRINCIPLE OF UGF- A POLICY CONDITION • INSURABLE INTEREST / INDEMNITY SUBROGATION/CONTRIBUTION APPLY

6. NEGLIGENCE • DEFINED IN ENGLISH CASE—BLYTH V/S BIRMINGHAM WATERWORKS COMPANY(1856) • …..THE BREACH OF A DUTY CAUSED BY THE OMISSION TO DO SOMETHINGWHICH A REASONABLE MAN ,GUIDED BY THOSE CONSIDERATIONS WHICH ORDINARILY REGULATE THE CONDUCT OF HUMAN AFFAIRS,WOULD DO OR DOING SOMETHING WHICH A PRUDENT AND REASONABLE MAN WOULD NOT DO……. • A CIVIL ACTION AGAINST NEGLIGENCE CAN BE ESTABLISHED ONLY WHEN THE FOLLOWING CONDITIONS ARE SATISFIED--- • Existence of Duty of Care • Breach of this Duty of Care • Causal Connection between Breach of Duty of Care and Injury/Damage sustained by the Claiment/Litigant • Quantum in monetory terms for the Injury/Damage sustained • LORD ATKIN’S NEIGHBOUR PRINCIPLE- …..A GENERAL DUTY OF CARE WAS OWED TO ALL LEGAL NEIGHBOURS i.e. THOSE SO CLOSELY AND DIRECTLY AFFECTED THAT THEY OUGHT TO BE IN CONTEMPLATION AT THE TIME THE TORT IS COMMITTED……

7. NEGLIGENCE….contd. • THE DEGREE OF CARE MAY VARY ACCORDING TO PARTICULAR CIRCUMSTANCES • PERSONS WHO USE DANGEROUS THINGS e.g. EXPLOSIVES,FIREWORKS etc. ARE BOUND TO EXERCISE MORE THAN ORDINARY CARE/CONTROL OVER SUCH PROPERTY • DUTY OF CARE TOWARDS CHILDREN IS REQUIRED TO BE OF A HIGHER DEGREE • THE PLAINTIFF MUST PROVE THE CAUSAL CONNECTION BETWEEN THE BREACH OF DUTY OF CARE AND THE INJURY/DAMAGE SUSTAINED BY HIM • TEST OF REASONABLE FORESEEABILITY INSTEAD OF DIRECT CONSEQUENCE AFTER 1961

8. NEGLIGENCE…contd. • ONUS OF PROOF—BURDEN OF PROVING NEGLIGENCE IS ON THE PLAINTIFF UNLESS IT IS A CASE OF RES IPSA LOQUITOR • DOCTRINE OF RESPONDENT SUPERIOR-AN EMPLOYER IS LIABLE FOR THE NEGLIGENCE OF HIS EMPLOYEE FOR ACTS COMMITED IN THE COURSE OF AND WITHIN THE SCOPE OF EMPLOYMENT.THIS IS ALSO KNOWN AS VICARIOUS LIABILITY • PRINCIPAL’S LIABILITY FOR NEGLIGENCE OF CONTRACTOR-MAY ARISE AS UNDER: • WHERE HE RETAINS SOME CONTROL OVER THE CONTRACTOR OR • PROVIDES LABOUR AND/OR MACHINERY OR • THE WORK INVOLVES SUPERVISION ON THE PART OF THE PRINCIPAL • THE WORK INVOLVES EXTRA-HAZARDOUS ACTS

9. NEGLIGENCE….contd. • FATAL ACCIDENTS ACT,1855—PROVIDES THAT IF DEATH OF A PERSON IS CAUSED BY WRONGFUL ACT, NEGLECT OR DEFAULT,AN ACTION FOR DAMAGES IS MAINTAINABLE BY THE LEGAL HEIRS OF THE DECEASED AGAINST THE PARTY CAUSING THE INJURY • DAMAGES ARE AWARDED IN PROPORTION TO THE FINANCIAL LOSS TO THE SURVIVORS/LEGAL HEIRS.THE TERM DAMAGES MEANS THE PECUNIARY COMPENSATION AWARDED BY THE COURT IN A CIVIL ACTION TO THE VICTIM FOR LOSS/INJURY SUFFERED DUE TO THE BREACH OF CONTRACT OR DUE TO TORTS • DAMAGES FOR PERSONAL INJURY FALL INTO TWO CATEGORIES: • SPECIAL DAMAGES- • LOSS OF EARNINGS • HOSPITALISATION AND MEDICAL EXPENSES • TRANPORTATION AND OTHER CONSEQUENTIAL LOSSES • GENERAL DAMAGES— • PAIN AND SUFFERING • LOSS OF EXPECTATION OF LIFE,LOSS OF CONSORTIUM/LOVE AND AFFECTION etc. • LOSS OF ENJOYMENT/AMENITIES

10. METHODS OF COMPUTATION OF SPECIAL DAMAGES IN CASE OF DEATH • WRIGHT’S METHOD— • Calculate the Monthly /Annual Dependency • Multiplier= Years Purchase Factor is worked out taking into account the following factors— • Probable Duration of the life of the Deceased • Probable Duration of the life of the Spouse/other Dependents • Possibility of Spouse remarrying • Acceleration of Interest in the Estate of the Deceased • Compensation = Annual Dependency x Multiplier • NANCE’S METHOD— • Calculate the Monthly /Annual Dependency • Multiplier will be based upon the expected useful life of the Deceased with proper Discounting towards Lumpsum Payment Factor and uncertainties for premature death/spouse remarriage,etc. • Compensation = Annual Dependency x Multiplier

11. DEFENCES AGAINST ALLEGATION OF NEGLIGENCE • VOLUNTI NON-FIT INJURIA—A PERSON WHO VOLUNTARILY CONSENTS TO RUN THE RISK HAS NO RIGHT OF ACTION AGAINST ANYONE FOR INJURIES SUFFERED AS A RESULT OF HIS ACTIONS • INEVITABLE ACCIDENT – ACCIDENT WHICH OCCURS INSPITE OF THE EXERCISE OF ORDINARY CARE,CAUTION,SKILL • ACT OF GOD– VIS MAJOR--- EVENT DUE TO NATURAL CAUSES DIRECTLY AND EXCLUSIVELY WITHOUT HUMAN INTERVENTION • EMERGENCY--- IS A MOMENT OF IMMINENT DANGER • CONTRIBUTORY NEGLIGENCE--- NEGLIGENCE ON THE PART OF THE PLAINTIFF HAS ALSO CONTRIBUTED TO THE ACCIDENT • CONTRACTING OUT--- BY INCORPORATING RESTRICTIVE CONDITIONS IN THE CONTRACT • LIMITATION--- ACTION BECOMING TIME-BARRED/SUIT-BARRED DUE TO THE LAW OF LIMITATION • ACCORD AND SATISFACTION--- CLAIM SETTLED BY AGREEMENT AND BINDING DISCHARGE OBTAINED

12. IMPORTANT STATUTES RELATING TO LIABILITY INSURANCE • CONSUMER PROTECTION ACT,1986--- protects the Consumer against the Manufacturer/Trader for Defects in the Products or against the Service Provider for Deficiency in Services. Insurance being a Service Sector will come within the ambit of the C.P.Act. Eg. Of Deficiency will be non-issuance of policy/delayed or wrongful or non-settlement of Claim Redressal Chain includes District Forum->State Commission National Commission-> Supreme Court • WATER (PREVENTION AND CONTROL OF POLLUTION ACT,1974 ---the Central and State Pollution Control Boards are established under this Act to control sewage and Industrial Affluent discharge • AIR (PREVENTION AND CONTROL OF POLLUTION ACT,1981--- structured on the lines of the Water Act and applies to Air Pollution • THE ENVIRONMENT PROTECTION ACT,1986– comprehensive Legislation for enforcement of Measures to protect the Environment and coordinate the activities of the Pollution Control Boards • THE FACTORIES ACT,1948 • EMPLOYEES COMPENSATION ACT,2009 (earlier W.C.Act,1923)

13. IMPORTANT ASPECTS OF LIABILITY UNDERWRITING • U/W process involves— • Identification and Critical Evaluation of Risks • Deciding the cover to be offered and finalising the Terms/Conditions including Limits of Indemnity (AOA/AOY) • Fixing the Premium commensurate with the Hazard Exposure • Hazard/Exposure is analysed on the basis of— • Physical Risk evaluation which will include a critical assessment of the information provided in the Proposal Form and a Risk Inspection,if need be • Legal Risk evaluation based upon the Legal Environment in the area falling within the Policy jurisdiction i.e.India/India including European Countries/India including USA/Canada,etc.

14. DEFINITIONS OF IMPORTANT TERMS WHICH ARE COMMON TO LIABILITY INSURANCE • Policy Period-- means the period commencing from the effective date and hour as shown in the Policy Schedule and terminating at midnight on the expiry date   • Period of Insurance-- means the period commencing from the retroactive date and terminating on the expiry date • Retroactive Date--- means the date of commencement of the first policy issued on Claims made basis and continuously renewed without any break • Bodily Injury--- means death, injury, illness or disease of or to any person • Defence Costs--- meansall costs, fees and expenses incurred with the Insurer’s prior consent in the investigation, defence or settlement of any claim made against the Insured and the costs of representation at any inquest, inquiry or other proceedings in respect of such a claim

15. EXTENDED BENEFITS • NOTIFICATION EXTENSION CLAUSE Should the Insured notify the Company during the Policy Period of any specific event or circumstance which may give rise to a claim under the policy, then the acceptance of such notification means that the Company will deal with such claim or claims as if they had first been made against the Insured during the Policy period. The extension under the Clause will be subject to the maximum time limit laid down under the Indian Limitation Act • EXTENDED CLAIM REPORTING CLAUSE In the event of non-renewal or cancellation of this Policy the Insurer will allow a time limit not exceeding 90 days from the date of expiry or cancellation of the policy provided--- • no insurance is in force during this extended reporting period for the same interest • all claims made during the extended reporting period shall be handled as if they were made on the last day of the expiring policy period

16. EXTENDED BENEFITS….contd. • CLAIMS SERIES CLAUSE Where a series of losses and/or bodily injuries and/or deaths are attributable directly or indirectly to the same cause or error or omission relating to discharge of professional services --- • all such losses and/or bodily injuries and/or death claims shall be added together and shall be treated as one claim • such claim shall be deemed to have been made when the first of the claims was made in writing • there shall be no coverage for claims made arising from one specific cause which are made later than 3 years after the first claim of the series • CROSS LIABILITY CLAUSE In certain circumstances when there are Multiple Insureds, the Insured Persons can have claims against each other within the policy scope. Such claims are Cross Claims and are payable if this Clause is incorporated in the policy

17. IMPORTANT LIABILITY INSURANCE POLICIES • CARRIER’S LEGAL LIABILITY • PUBLIC LIABILITY INSURANCE ACT POLICY • PUBLIC LIABILITY—NON INDUSTRIAL RISKS • PUBLIC LIABILITY—INDUSTRIAL RISKS • PRODUCT LIABILITY • WORKMEN’S COMPENSATION LIABILITY • COURIER’S LEGAL LIABILITY • LIFT THIRD PARTY LIABILITY • DIRECTORS AND OFFICERS LIABILITY • PROFESSIONAL INDEMNITY • COMMERCIAL GENERAL LIABILITY • SOFTWARE ERRORS AND OMISSIONS POLICY

18. POLICIES COVERING STATUTORY LIABILITIES

19. BHOPAL GAS TRAGEDY • The Bhopal disaster, also referred to as the Bhopal gas tragedy, was a gas leakincident in India, considered the world's worstindustrial disaster.[1] • It occurred on the night of 2–3 December 1984 at the Union Carbide India Limited (UCIL) pesticide plant in Bhopal, Madhya Pradesh. • Over 500,000 people were exposed to methyl isocyanate gas and other chemicals. The toxic substance made its way in and around the shanty towns located near the plant • The final compensation, including interim relief for personal injury was for the majority Rs.25,000/- (US$380) For death claim, the average sum paid out was Rs.62,000/- (US$950). • In court, the claimants were expected to prove "beyond reasonable doubt" that death or injury in each case was attributable to exposure. By the end of October 2003, compensation had been awarded to 554,895 people for injuries received and 15,310 survivors of those killed. • In 2007, 1,029,517 cases were registered and decided. Number of awarded cases were 574,304 and number of rejected cases 455,213. Total compensation awarded was Rs.1546.47 crs.On 24 June 2010, the Government of India approved a 12650 crs.aid package which would be funded from the Indian taxpayers Money

20. THE FIGHT FOR JUSTICE CONTINUES EVEN AFTER 30 YEARS

21. PUBLIC LIABILITY INSURANCE ACT POLICY • PLI ACT WAS FRAMED BY THE GOVERNMENT IN 1991 TO PROVIDE COMPENSATION TO THE VICTIMS OF ACCIDENTS OCCURRING DUE TO THE HANDLING OF ANY HAZARDOUS SUBSTANCES DEFINED UNDER THE ENVIRONMENTAL PROTECTION ACT 1986 AND EXCEEDING SUCH QUANTITY AS IS SPECIFIED UNDER THE PLI ACT. HANDLING WILL INCLUDE MANUFACTURING/ STORAGE/ TRANSPORTATION etc. • SALIENT FEATURES • THE AOA LIMIT CAN BE CHOSEN UPTO MAX.Rs.5crs. • THE AOY LIMIT WILL BE THREE TIMES THE AOA LIMIT SUBJECT TO MAX.Rs.15crs. • AN AMOUNT EQUIVALENT TO PREMIUM WILL BE COLLECTED AS ENVIRONMENT RELIEF FUND

22. PUBLIC LIABILITY INSURANCE ACT POLICY…contd. 4. LIABILITY BEYOND THE LIMITS OF INSURANCE WILL BE MET BY THE ENVIRONMENT RELIEF FUND 5.LIABILITY BEYOND THE TOTAL OF INSURANCE AND ENVIRONMENT RELIEF FUND WILL BE BORNE BY THE OWNER/INSURED 6.THE RATING STRUCTURE WILL DEPEND UPON- • LIMIT OF INDEMNITY • TURNOVER 7.THE SCHEDULE OF COMPENSATION WILL BE AS FOLLOWS- • FATAL ACCIDENT—Rs.25000/-per person • PERMANENT TOTAL DISABLEMENT—Rs.25000/- • PERMANENT PARTIAL DESABLEMENT--- as per Disability certified RMP • TEMPORARY PARTIAL DISABLEMENT----max.Rs.1000/-for three months only and subject to Hospitalisation beyond 3 days for those over 16yrs.age • MEDICAL EXPENSES—max.Rs.12500/- • REIMBURSEMENT OF T.P.PROPERTY DAMAGE– max.Rs.6000/-

23. SALIENT PROVISIONS OF THE WORKMEN’S COMPENSATION ACT,1923—amended as EMPLOYEES COMPENSATION ACT,2009 • Employer liable under Law towards the Employee to pay compensation in respect of Death/Disablement due to accidental Injury arising out of and in the course of Employment • An Occupational Disease as specified in the Act is deemed to be an injury arising out of and in the course of Employment • Employer not liable for Disablement of Employee caused by an accident attributable to— • Employee having been under the influence of Drinks/Drugs • Willful Disobedience by Employee of the Orders and Rules expressly given to secure the safety of Workmen/Employees • Willful removal/disregard by the Employee of any safety device Note: Above defences are not available to the Employer if the Injury results in Death of the Workman/Employee

24. DEFINITION OF TERMS AND LIMITS OF LIABILITY • DEFINITION OF TERMS: • TOTAL DISABLEMENT– Disablement of a Temporary or Permanent Nature which incapacitates the Employee for all work which he was capable of performing at the time of the accident resulting in such Disablement • PARTIAL DISABLEMENT— where the Disablement is Temporary—reduces the earning capacity of the Employee in any employment in which he was engaged at the time of the accident and where the Disablement is Permanent---reduces his earning capacity in EVERY EMPLOYMENT of which he was capable of undertaking at the time of the accident • LIMITS OF COMPENSATION- • DEATH- 50% OF AVERAGE MONTHLY WAGES X RELEVANT FACTOR( MINIMUM Rs.120000/-) • PTD-60% OF AVERAGE MONTHLY WAGES X RELEVANT FACTOR ( MINIMUM Rs.140000/-) • PPD-%age OF PTD AS PER SCHEDULE • TEMPORARY DISABLEMENT-COMPENSATION PAYABLE ON THE BASIS OF HALF-MONTHLY WAGES FOR EACH MONTH OF DISABLEMENT.TIME EXCESS OF 3 DAYS FOR DISABLEMENT UPTO 28 DAYS.COMPENSATION PAID ON ACTUAL WAGE BASIS

25. IMPORTANT AMENDMENTS INTRODUCED VIDE ACT,2009 • All reference to Workmen has been amended to Employee • Clerical Employees will now come under the purview of the Act • Reimbursement for Funeral Expenses enhanced from Rs.2500/- to Rs.5000/- • Maximum Monthly wages for calculation of compensation for Death/Permanent Disablement enhanced to Rs.8000/-(wef 31/05/2010) • Reimbursement of Medical Expenses will be as per actuals incurred by the Employee

26. SALIENT ASPECTS OF THE EMPLOYERS LIABILITY INSURANCE POLICY • SCOPE • POLICY INDEMNIFIES THE INSURED EMPLOYER AGAINST LEGAL LIABILITY TOWARDS HIS EMPLOYEES FOR DEATH/DISABLEMENT DUE TO ACCIDENTAL INJURIES ARISING OUT OF AND IN THE COURSE OF EMPLOYMENT i.e. EMPLOYMENT RELATED INJURIES. • POLICY CAN BE EXTENDED BY PAYMENT OF ADDITIONAL PREMIUM TO COVER MEDICAL EXPENSES, EMPLOMENT RELATED DISEASES LIKE ASBESTOSIS etc., PRINCIPAL’S LIABILITY TO THE EMPLOYEES OF THE CONTRACTORS • POLICY IS ISSUED ON UNNAMED BASIS AND IT IS MANDATORY TO COVER ALL EMPLOYEES ON THE BASIS OF ESTIMATED GROSS WAGES FOR THE POLICY PERIOD. • PREMIUM IS ADJUSTABLE ON ACTUAL WAGE BASIS AT POLICY EXPIRY. • PREMIUM RATES ARE RELATED TO THE NATURE OF THE MAIN ACTIVITY OF THE INSURED • THE BUSINESS HAS BEEN DE-TARIFFED W.E.F.01/01/07 • IT IS PERMISSIBLE TO ISSUE A POLICY FOR LESS THAN ONE YEAR DEPENDING UPON THE WORKS CONTRACT

27. SALIENT ASPECTS OF THE EMPLOYERS LIABILITY INSURANCE POLICY..contd. • INSURANCE SCHEME PROVIDES FOR TWO TERMS OF INSURANCE VIZ.- 1. TABLE A POLICY-WHICH PROVIDES INDEMNITY AGAINST LEGAL LIABILITY FOR EMPLOYMENT INJURIES TO ALL EMPLOYEES(WHETHER WORKMEN OR NOT) UNDER • W.C.ACT, • FATAL ACCIDENTS ACT, • COMMON LAW • TABLE B POLICY- WHICH PROVIDES INDEMNITY AGAINST LEGAL LIABILITY FOR EMPLOYMENT INJURIES UNDER • FATAL ACCIDENTS ACT AND • COMMON LAW TO EMPLOYEES WHO FALL UNDER NON-WORKMEN CATEGORY.TO OBTAIN COMPENSATION, NEGLIGENCE ON THE PART OF THE EMPLOYER MUST BE PROVED.

28. SALIENT PROVISIONS OF THE EMPLOYEES STATE INSURANCE SCHEME • This is a Social Legislation for all Industrial Workers within the notified Jurisdiction. It is a Contributory Scheme and deductions towards Membership are compulsory. The Scheme overrides the W.C.Act. In effect, persons covered under the ESIS are not eligible for W.C.Benefits • The Scheme applies to all the Factories employing 10 or more Employees and Shops/Hotels/Restaurents/Cinema Theatres/Road Motor Transport Undertakings and Newspaper Establishments having 20 or more Employees on Rolls • The Wage Limit for eligibility is Rs.15000/-per month • Benefits— • All Hospitalisation Treatment of Members/Dependents • Allowance for Diseases and Long Term Ailments provided to the Members • Compensation for Employment related Accidents and Occupational Diseases

29. LIABILITY POLICIES ISSUED TO CARRIERS/MULTIMODAL TRANSPORT OPERATORS

30. CARRIER’S LEGAL LIABILITY • The scheme provides for two types of covers viz, I. Basic Cover- which includes only the perils of--- Fire (b) Explosion (c) Accident II. Wider Cover- which provides the following extensions to a varying extent at extra premium-- • Basic cover for Hired vehicles • Goods lying at Warehouses/ Transhipment yards whilst in the custody of the carriers against the perils of • Fire , RSMD ,Burglary,Theft/Pilferage • Flood water damage, Damage by other cargo • Breakage, Leakage, Damage due to improper handling  • Special Condition: Vehicle insured under Carrier’s Legal Liability policy must be insured comprehensively under Motor Package Policy

31. MTO LIABILITY INSURANCE POLICY • These Operators are governed by the Multimodal Transportation of Goods Act,1923 • They are primarily liable for Loss/Damage to the Cargo entrusted to them for Transportation • The policy covers the following Contingencies— • Cargo Liability/Cargo’s contribution to GA/Salvage Charges/Extra Costs incurred for quarantine, fumigation, debris removal, sending mis-directed Cargo to the correct Destination • Third Party Liability • Professional Indemnity • Fines and Duties levied due to unintentional breach of Regulations/Statutory Provisions

32. PUBILC LIABILITY POLICIES FOR INDUSTRIAL AND NON-INDUSTRAIL RISKS

33. PUBLIC LIABILITY-NON INDUSTRIAL RISKS • PUBLIC LIABILITY POLICY CAN BE TAKEN BY THE FOLLOWING NON-INDUSTRIAL CUSTOMERS– • HOTELS/RESTAURENTS/MOTELS/CLUB HOUSES/LODGES • CINEMA HALLS/THEATRES/AUDITORIUMS/OPEN AIR THEATRES/PUBLIC HALLS/ MEDICAL ESTABLISHMENTS • RESIDENTIAL SOCIETIES • SCHOOLS/ PUBLIC LIBRARIES/RESEARCH INSTITUTIONS • FILM STUDIOS/PERMANENT AMUSEMENT PARKS • FAIRS/FETES/RELIGEOUS GATHERINGS/CIRCUS/ZOO/STADIUMS • DEPOTS/WAREHOUSES/GODOWNS • SHOPS • OFFICES • CONTRACTORS FOR MAINTENANCE JOBS

34. PUBLIC LIABILITY--NON-INDUSTRIAL RISKS…contd. • The policy operates on a claims made basis. The insured should have a policy in force at the time of occurrence of the event giving rise to the claim as well as at the time when a claim is lodged against the Insured. The claim will be settled on the policy which is in force on the date of a claim first made in writing. • All accidents occurring during the retroactive period will be within the scope of the current years policy if the claims are first made during the current policy. • The policy incorporates--- Notification extension clause, Extended Claims Reporting Clause/ Claims Series Clause • EXTENSIONS– Property in the Custody of the Insured/Sports Facilities/Food and Beverages/Swimming Pool

35. PUBLIC LIABILITY-INDUSTRIAL RISKS • SCOPE: • INDUSTRIAL PUBLIC LIABILITY POLICY APPLIES TO INDUSTRIAL AND MANUFACTURING RISKS OF ALL TYPES • POLICY COVERS LIABILITY TO THE PUBLIC ARISING OUT OF ACCIDENTS DUE TO THE NEGLIGENCE OF THE INSURED/SERVANTS • S/I MUST BE EXPRESSED IN RATIOS 1:1,1:2,1:3 &1:4 OF AOA TO AOY LIMITS • THE IMPORTANT FEATURES OF THIS POLICY ARE: • THE POLICY OPERATES ON CLAIMS –MADE BASIS i.e. THE INSURED MUST HAVE A POLICY IN FORCE AT THE TIME OF OCCURANCE OF THE EVENT GIVING RISE TO THE CLAIM AS WELL AT THE TIME WHEN A CLAIM IS LODGED WITH THE INSURER.THE CLAIM WILL BE SETTLED BY THE POLICY WHICH IS IN FORCE ON THE DATE WHEN THE CLAIM IS FIRST MADE IN WRITING AGAINST THE INSURED BY ANY THIRD PARTY • THE POLICY INCORPORATES THE --- • POLICY PERIOD • PERIOD OF INSURANCE • RETROACTIVE DATE • NOTIFICATION EXTENSION CLAUSE • EXTENDED CLAIMS REPORTING CLAUSE • CLAIMS SERIES CLAUSE

36. PUBLIC LIABILITY-INDUSTRIAL RISKS..contd. • SALIENT FEATURES • PREMIUM RATE-WILL DEPEND UPON • RISK GROUP • RATIO OF AOA/AOY LIMITS • ANNUAL TURNOVER • EXTENSIONS • MULTIPLE UNITS CAN BE COVERED UNDER SINGLE INDEM NITY LIMIT • ACCIDENTAL POLLUTION LIABILITY • COVERAGE OF DISCHARGE OF TREATED EFFLUENTS THROUGH PIPELINES TO THE DISCHARGE POINT • COVERAGE OF GODOWNS/WAREHOUSES LOCATED OUTSIDE THE FACTORY PREMISES • COVERAGE FOR AOG PERILS • TRANSPORTATION COVER • TECHNICAL COLLABORATORS LIABILITY

37. LIMITS OF INDEMNITY • The Limits of Indemnity(AOA/AOY) in a typical Public Liability Policy will be decided taking into account the following factors— • Organisation’s Business, Risk Exposure, Asset Size, Magnitude of Operations • Public Perception • Income Levels of the population in the surrounding areas • Customers • Number of Persons/locations covered • Territory and Jurisdiction

38. PRODUCT LIABILITY

39. PRODUCT LIABILITY • SCOPE • POLICY COVERS LIABILITY,INCLUDING DEFENCE COSTS, ARISING OUT OF THIRD PARTY ACCIDENTAL DEATH/BODILY INJURY OR DISEASE OR PROPERTY DAMAGE DUE TO ANY DEFECT IN THE PRODUCTS MANUFACTURED AND COVERED UNDER THE POLICY AFTER SUCH PRODUCTS HAVE LEFT THE INSURED’S PREMISES • BY PAYMENT OF ADDITIONAL PREMIUM, COVERAGE MAY BE OBTAINED FOR COST OF REMOVING/ REPLACING/ REPAIRING / RECALLING THE DEFECTIVE PRODUCT • POLICY IS SUBJECT TO RETROACTIVE DATE, NOTIFICATION EXTENSION,CLAIMS SERIES CLAUSE,EXTENDED CLAIMS REPORTING CLAUSE etc.

40. PRODUCT LIABILITY…contd. • SALIENT FEATURES- • PREMIUM RATES ARE BASED UPON RISK GROUP CLASSIFICATION, ANNUAL GROSS TURNOVER,AOY LIMIT ETC. • MIDTERM INCREASE/DECREASE IN THE LIMITS OF INDEMNITY CAN BE CONSIDERED SUBJECT TO CORRESPONDING REVISION IN THE RETROACTIVE DATE. • POLICY MAY BE EXTENDED TO COVER LIMITED VENDOR’S LIABILITY IN RESPECT OF EXPORTS/ SUB-CONTRACTORS LIABILITY/ /TECHNICAL COLLABORATORS

41. DIRECTORS AND OFFICERS LIABILITY

42. DIRECTOR’S AND OFFICER’S LIABILITY INSURANCE • SCOPE: • DIRECTORS ARE NOW PERCEIVED AS PROFESSIONAL MANAGERS WHO SHOULD BE ACCOUNTABLE FOR THEIR ACTIONS. • A DIRECTOR/OFFICER owes a duty towards-- a) The Company b) The Shareholders of the Company c) Employees d) Creditors e) Customers f) Competitors g) Members of the Public h) Government and Other Regulatory Bodies

43. DIRECTOR’S AND OFFICER’S LIABILITY INSURANCE….contd. • HE IS LIABLE TO FACE CIVIL AND/OR CRIMINAL SUITS FROM THESE QUARTERS FOR BREACH OF DUTY DUE TO WRONGFUL ACTS RESULTING FROM VARIOUS REASONS WHICH MAY INCLUDE— 1) Failure of supervision as per Company norms 2) Inaccurate Financial Statements/ Errors in annual accounts 3) Mismanagement of Fund 4) Mis-statement in prospectus 5) Allotment of shares 6) Unaluthorised or imprudent loans/investment 7) Failure to obtain competitive bids 8) Imprudent expansion resulting in loss 9) Unwarranted dividend payment, salaries or compensation 10) Misleading statement filed with Stock-Exchange 11) Wrongful dismissal/ Sexual Harassment of an employee 12) Actual or alleged breach of trust

44. DIRECTOR’S AND OFFICER’S LIABILITY INSURANCE….contd. • WRONGFUL ACT IS DEFINED IN THE POLICY AS FOLLOWS— ACTUAL OR ALLEGED BREACH OF DUTY,BREACH OF TRUST,NEGLECT,ERROR,MISSTATEMENT,MISLEADING STATEMENT,OMMISSION,BREACH OF WARRANTY OR AUTHORITY OR OTHER ACT DONE OR WRONGFULLY ATTEMPTED BY ANY DIRECTOR/OFFICER • THE INSURANCE COVERAGE APPLIES TO ALL DIRECTORS OF THE INSURED ORGANISATION INCLUDING NON-EXECUTIVE OR SHADOW DIRECTORS, ALL OFFICERS OF THE ORGANISATION, INCLUDING MANAGERS OR COMPANY SECRETARY, PAST DIRECTORS/OFFICERS AND NEW POSITIONS CREATED AFTER INCEPTION OF THE POLICY. • POLICY COMPRISES TWO SECTIONS- • INDIVIDUAL D&O SECTION- WHICH INDEMNIFIES THE DIRECTORS/OFFICERS IN RESPECT OF CLAIMS MADE AGAINST THEM • COMPANY REIMBURSEMENT SECTION-INDEMNIFIES THE COMPANY IN RESPECT OF CLAIMS MADE AGAINST THE DIRECTORS/OFFICERS WHICH IT IS LIABLE TO REIMBURSE IN ACCORDANCE WITH THE ARTICLES OD ASSOCIATION

45. PROFESSIONAL INDEMNITY INSURANCE

46. PROFESSIONAL INDEMNITY POLICY • The policy covers liability arising out of errors, omissions or negligence on the part of the professionals whilst rendering their services • Policy can be issued to doctors, medical establishments, engineers, architects, interior decorators, chartered accountants, financial and management consultants, advocates etc. • Policies are issued for 12 months and must be renewed without any break to obtain the benefit of Retroactive date • Cancellation of the policy at the request of the insured will be on short period scale subject to no claim • The policy will indemnify any act committed by the Insured and their qualified, paid employees, giving rise to any legal liability to the party to whom Professional Services have been rendered during the period of insurance commencing from retroactive date

47. COVERAGE UNDER DOCTOR’S PROFESSIONAL INDEMNITY POLICY • INDEMNITY • The Indemnity applies only to claims arising out of bodily injury and/or death of any patient caused by any error or negligent act of commission/ omission in the professional service rendered by the -- • Insured or • Qualified assistants or any nurse or technician employed by the Insured •  PROVIDED ALWAYS THAT-- • The Negligent Act should be committed during the Period of Insurance • The Negligent Act should result in a claim being first made in writing against the Insured during the Policy Period • There shall be no liability for any claim made against the Insured for act committed prior to the Retroactive Date • If the Doctor wishes to cover unqualified staff working with him, the same may be allowed by collecting additional premium of 7.5% of the indemnity premium. • Where multiple professional specialisation is involved, the rate applicable will be that of the specialisation which attracts the higher premium rates.

48. IMPORTANT POLICY EXCLUSIONS • Any criminal act or any act committed in violation of any law or ordinance • Liability assumed by agreement • Cosmetic Surgery(Cosmesis) • Liability arising out of Deliberate, willful or intentional non-compliance of statutory provisions. • Genetic injuries caused by x-ray treatment or diagnosis with radio-active substances. • Liability arising out of Professional services rendered by the Insured prior to the retroactive date • War and warlike perils • Liability arising out of all personal injuries such as libel, slander, false arrest, wrongful eviction, wrongful detention, defamation, mental injury, anguish or shock, fines, penalties, punitive or exemplary damages. • injury/death to any person under the contract of employment or apprenticeship with the Insured • Nuclear fuel/ionising radiation/radioactive contamination • Losses/Liability of pure financial nature such as loss of goodwill/market etc.

49. PREMIUM RATING (rate per mille) • Doctors/Medical Practitioners

50. PROFESSIONAL INDEMNITY POLICY-MEDICAL ESTABLISHMENTS • SALIENT FEATURES • Policy will indemnify the insured in respect of any negligent act of error, omission/ comission by the professionals or qualified assistants named in the proposal, engaged by the medical establishment which gives rise to any Third Party legal liability. Such activities will be part of the declared medical activities of the establishment • Medical establishments shall be Registered with competent authority as per the local regulations. If necessary applications have been made for such registration and the same have not been rejected, then this requirement shall be deemed to have been complied