The Public Liability Insurance Act, 1991
Administered Ministry: Ministry of Environment, Forest and Climate Change
Act details
| Short title | The Public Liability Insurance Act, 1991 |
|---|---|
| Long title | 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. |
| Act number | 6 of 1991 |
| Act year | 1991 |
| Enactment date | 22 Jan 1991 |
| Ministry | Ministry of Environment, Forest and Climate Change |
| Jurisdiction | Central (Parliament of India) |
| Sections | 28 |
| Schedules | 1 |
| Status | Not repealed |
| Last checked on India Code | 31 Oct 2026 |
| Source | India Code, Government of India |
Summary
Summary of the Public Liability Insurance Act, 1991
Purpose:
To provide immediate relief to persons affected by accidents involving hazardous substances through public liability insurance.
Key Components:
1. Scope and Initiation: - Enactment: Came into force as notified by the Central Government.
• Application: Applies to accidents with hazardous substances, excluding certain exceptions.
2. Definitions: - Key Terms: Accident, Hazardous Substance, Owner, and Insurance are defined in the context of the Act's objectives.
3. Core Provisions: - No-Fault Liability: For providing immediate relief in specified cases.
• Mandatory Insurance: Owners of hazardous substances must secure insurance coverage.
• Accident Response: Mechanisms for verification, publication, and subsequent relief measures.
• Environmental Relief Fund: Established for managing and disbursing relief.
• Compliance and Penalties: Strict adherence required; non-compliance attracts significant penalties.
4. Operational Framework: - Claim Process: Outlined for affected individuals to seek relief.
• Judicial and Administrative Powers: Granted for effective implementation and enforcement.
• Miscellaneous Provisions: Addressing cognizance of offences, delegation of powers, and protection for actions in good faith.
Legislative history
Legislative History:
The Public Liability Insurance Act, 1991
Short Title The Public Liability Insurance Act, 1991
Act Number / Year 21 of 1991
Act ID (India Code) 199121
Presidential Assent / Enactment Date January 22, 1991
Enforcement Date April 1, 1991
Administrative Nodal Ministry Ministry of Environment, Forest and Climate Change
Precedent & Statutory Rationale
• Aftermath of Industrial Disasters and Inadequate Tort Remedies:
o Following industrial tragedies like the 1984 Bhopal Gas Leak Disaster, it became starkly evident that victims of hazardous chemical accidents suffered immensely due to protracted civil court procedures, difficulties in proving negligence, and the lack of mandatory financial liability or insurance cover maintained by industrial units.
o Standard common law tort remedies failed to ensure swift, no-fault compensation for innocent bystanders and third parties impacted by hazardous industrial operations.
• Legislative Intervention and Regularization:
o Enacted to mandate that all owners handling hazardous substances take out mandatory public liability insurance policies to provide instant financial relief on a "no-fault" liability basis.
o The core objective was to establish an Environment Relief Fund, streamline quick claims processing for death, injury, or property damage resulting from industrial accidents, and enforce strict accountability and safety compliance across hazardous industrial units.
Parliamentary Trajectory & Enactment
• Formulation: Framed by the Central Government in direct response to judicial observations and public safety imperatives following major industrial chemical disasters.
• Parliamentary Passage: Passed by both houses of Parliament, receiving formal presidential assent on January 22, 1991.
• Enforcement: Enforced on April 1, 1991
• Source: India Code and Ministry of Environment, Forest and Climate Change Official Records.