How is Public Liability Act Premium Bifurcated from the Environmental Relief Fund?

The environment relief fund is a part of the public liability insurance act. The inclusion of an environment relief fund was made in order to provide immediate relief to the plaintiff or victim of the accidents. The industries that deal in hazardous substances are mandated to pay a public liability act premium. They have to buy an insurance policy in order to provide relief to the victim.

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Public Liability Act Premium

The public liability act premium is the amount that is based on the risk associated with the company of the insured. The business must compulsorily subscribe to the public liability act premium in order to ensure the security of the individual.

The public liability act is the response or repercussion of absolute liability which was discovered in M.C. Mehta v. Union of India. The pronouncement of the case by the Supreme Court of India mandated industries to subscribe to the public liability insurance policy.

Bifurcation of Environmental Relief Fund (ERF)

The Public Liability Insurance Act of 1991 empowers the central government to organize the ERF in order to administer immediate relief to the victim of a tragedy. It provides them with rehabilitation and medical facilities. The fund is expected to compensate the family of the deceased and the survivors of an unfortunate event.

Section 3 of the Public Liability Insurance Act of 1923 states that the owner for the death or injury from an accident. He must grant immediate relief to the victim. Further, the section states that the owner must grant compensation for the damage caused to the property resulting from such an accident.

Clause 2 of the same section further states that the claimant is not required to establish or substantiate that the death or damage or loss has been caused or the claim has been made due to the wrongful act of the owner. The explanation of clause 2 states that the injury under this section shall include permanent or partial disability.

Award of Relief

Section 7 of the public liability policy states that:

  • The collector after releasing a notice for inviting applications from the victim of an accident shall grant the opportunity to the parties to be heard.
  • The collector shall conduct or hold an inquiry against the claim made by the parties and determine the award for such claims if found to be valid.
  • The collector shall further ascertain to deliver the copies of the award to the parties concerned to the event within fifteen days after granting the award.
  • The collector may enjoy the power of a civil court in order to take evidence or oath into the notice. Further, the collector shall be a deemed civil court as prescribed in section 195 of chapter XXVI of the CPC (Code of Criminal Procedure), 1973.

Establishment of ERF

Section 7A of the public liability policy act states that the central government, by issuing a notification under the official Gazette may establish the ERF. The ERF shall be utilized to reimburse the damage or loss caused to the public or property due to an unfortunate event.

Further, the central government by issuing a notification under the official Gazette may specify the following:

  • An authority under which the ERF shall be vested
  • The manner in which the ERF shall be administered
  • The manner in which the compensation of money of ERF should be drawn


Industries dealing with hazardous substances must subscribe to the public liability act premium. It must purchase liability insurance to grant immediate relief to the victim. The central government is expected to supervise the provision made under the act.

Written By: PolicyBazaar - Updated: 20 June 2023
Policybazaar for Business - Comprehensive Liability Insurance - Customer Reviews
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4.3 April 09, 2023
Competitive Premiums
The premiums offered by PolicyBazaar for the Comprehensive General Liability Insurance are competitive, considering the extensive coverage and top-notch customer service they provide.Truly recomend it.
4.3 March 28, 2023
Worth Buying
PolicyBazaar worked closely with me to tailor the coverage to meet the specific needs of my business.Worth buying.
3.8 March 16, 2023
Wide Coverage
One of the most significant aspects of this insurance is its coverage. It provides extensive protection against a wide range of liabilities, including bodily injury, property damage, etc. Thanks for the policy PB
3.8 March 04, 2023
Peace Of Mind
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3.8 February 20, 2023
Claim Process Is Hassle Free
PolicyBazaar's claims process is efficient and hassle-free. In the unfortunate event of a claim, they handled everything swiftly and professionally, ensuring a smooth resolution without unnecessary delays. This reliability and promptness have further strengthened my trust in their services.Thankyou.
4 February 20, 2023
Great Customer Support
PolicyBazaar can help you get your Insurance as I am in the construction Industry and needed some guidance on risk concerns. I contacted PolicyBazaar Team, whO explaned to me the process to get the Insurance. Thank you PolicyBazaar.
3.8 February 16, 2023
Damages Covered
I recently purchased CGL insurnace from PolicyBazaar. They helped me to cover my damages. Thankyou.
4 February 12, 2023
Helpful Team
We were looking to buy Comprehensive General Liability Insurance Plan that protects Third party property from any accidental damage at my workplace. So we landed on the PolicyBazaar website. It was well managed and described all the benfits in detaill... We contacted their Customer support and dcided to buy from them. Thanks, PolicyBazaar Team
3.8 February 08, 2023
All In One Platform
It is an All in one platform which provided me unique perks, Low premium prices and a fast claim settlement process. Thankyou PB. Excellent platform.
4.3 February 04, 2023
Good Package
Got a really good coverage. Thanks, PolicyBazaar