Ensuring Public Safety through Public Liability Insurance
Shrirang V Samant 05 August 2022
The tragic death of singer KK in Kolkata must be fresh in everyone’s mind. It was during a concert that he suffered a cardiac arrest and died while being taken to the hospital. While the cause of the singer’s death remains unknown, questions were being raised about the arrangements at the venue, where air conditioning was allegedly not working properly. In a report, NDTV news channel said videos shot by fans at the concert showed the singer “sweating profusely as he took a break to wipe his face.” Many on social media said the auditorium, with a capacity of 2,400 people, was overcrowded.
This tragic loss of life raises a few questions, such as why emergency medical equipment is not available at our public venues. When a large number of people are going to be in attendance, should it not be a standard operating procedure (SOP) to keep a well-equipped ambulance or medical van on standby at the venue? 
Those of us who have travelled in more advanced countries know that such things as defibrillators are mandatory in shopping malls and restaurants, schools or basically any place where people visit. There has to be at least one staff member who is trained in basic first-aid. The licensing authorities, such as municipalities, take such matters very seriously.
It is also likely that some people, especially those in authority, will laugh such suggestions away as absurd. After all, the mindset of the powers that be—and, in fact, of society in general—is that people who venture out do so at their own risk. As a result, our public places are never designed keeping in mind the safety and well-being of the users. 
Readers would remember that Moneylife Foundation successfully pursued a case where a senior citizen slipped and fell while visiting a bank branch and the bank abandoned him to his fate. The victim had to foot a large medical bill, which the bank refused to pay, let alone paying any damages for pain and suffering. Eventually, with the intervention of Reserve Bank of India (RBI) at the behest of Moneylife Foundation, a level of compensation was paid to the person. (Read: Moneylife Impact: SBI Finally Pays Reimbursement of Medical Expenses to Customer Who Suffered Accident inside Branch Premises
All of us have witnessed the totally callous approach of the managers of public facilities towards ensuring the safety of visitors and ensuring that there is an established SOP to provide help if an accident occurs on the premises. Add to this, the unwillingness of the management at such places to help the victim of the accident which causes avoidable fatalities.
Let us now look at another vital dimension of this issue. How safe do you feel walking down the footpaths in your locality? This is not a rhetorical question about the law-and-order situation. This is about the plain and simple worry about not tipping over a loose stone or a crack in the footpath or falling into an open manhole! 
If you have witnessed or been a victim of an accident due to the failure or negligence of the municipality, do you know of anyone who has complained to municipality and claimed compensation? 
You would probably dismiss this thought as impractical if not downright absurd given the difficulties involved in taking any such action. 
Many of us simply don’t even think of holding public authorities to account, despite being aware that all public authorities owe a duty of care to the people. 
There are similar instances of injury or death caused to visitors by careless housekeeping or unsafe layout of malls, restaurants, or any other commercial establishments such as shops, offices and banks. 
There is little tendency to seek compensation for loss or damage suffered by a member of the public, for several reasons. Firstly, a lack of awareness of one’s rights and the duty of care owed to people by these establishments; secondly, the callous attitude of the officials, owners, or managers of such establishment towards public; and, lastly, unwillingness to initiate legal action due to the hassle and expenses involved in suing the establishment whose lack of care caused such accident.
A complete lack of concern for other people’s safety is certainly not a sign of a civilised society. Those familiar with the situation in more developed countries know that there is tremendous emphasis on providing a safe environment for people. This concern for public safety did not come about overnight. It evolved over the years out of the law or torts and public activism. 
Broadly speaking, in our country the only example of legally mandated compensation is the law relating to motor vehicles which makes third-party liability insurance mandatory. The principle is the same— anyone driving a motor vehicle in a public place owes a duty of care to other users of the space. This concept was recognised alongside the invention of motor vehicles and a law is in place to protect the victims of accidents caused by the vehicles. 
In our country too, motor vehicle legislation provides for compulsory compensation. There is a fair degree of public awareness of this and, generally speaking, all motor accident victims are compensated through a well-organised system under this insurance. 
It is another matter that, despite compulsory legislation, there are still any number of uninsured motor vehicles on the road; but this is a separate topic altogether. 
The principle behind compulsory third-party insurance is that if the owner or driver of the motor vehicle is unable to pay compensation, the hapless victim should not suffer and insurance should step in. As a result, a comprehensive ecosystem of compensation for victims of motor accidents has developed over the years.
Does any other piece of legislation exist in our country to provide relief to victims of accidents in public places? A law was enacted after the infamous Bhopal gas leak event which has been tweaked over the years. This is known as Public Liability Insurance Act 1991. It is legally mandatory only for industries and warehouses that operate in a hazardous environment. 
The policy covers claims from any members of the public, clients or customers suffering from an accident or incident, while on business premises, if the concerned individual or business is found to be liable. This Act does not make it mandatory for individuals, businesses and other non-commercial organisations to obtain a public liability insurance cover for injury, death, or damage, for general members of public visiting their premises.  
Globally, public liability insurance is not a mandatory product but is still a regular feature that has been strongly recommended in countries such as the US. Businesses and their owners can become liable for damages or injuries to another person or property if an accident occurs on their premises. The likelihood of being sued for such negligence is extremely high and compensation can be substantial. Hence, the need for public liability insurance. 
Why is it that no laws exist in our country for compensating accident victims in public places? 
It can be argued that such laws for users of public places do not normally exist in other advanced countries. But the reason for absence of mandatory third-party liability insurance in the developed world is that people there have high levels of awareness of their rights and the duty of care owed to them by others.
 Any victim of slightest damage to person or property promptly seeks compensation and the court system is quick to award damages–often exemplary–if a mutually agreed compensation is not arrived at. As a result, anyone who owns or manages a public place, including shops, buys public liability insurance. 
As said earlier, in our country, people are not aware of their rights in this regard and, even if they are and claim compensation, they will have to take legal action to make the negligent party pay. Therefore, the owners of shops, restaurants, offices, and commercial establishment have no incentive to buy insurance on their own. Public safety is a hallmark of a civilised society which is sadly lacking in our collective consciousness.
What can be done? It will take a long time to create the consciousness of public safety in our authorities. But a beginning needs to be made or countless people will continue to suffer physical and financial loss.
 The first step is to enhance the awareness of general public that safety is their fundamental right and all public places should be designed with safety in mind. People should also know that most of the commercial establishments, such as banks and other large institutions, do have public liability insurance.
The next step is to sue for compensation if any death or injury is suffered by a visitor to these places. Admittedly, given the creaking wheels of our legal system, going to the court is not always a practical or fruitful option for people. However, it is often the case that most institutions will respond to legal notices out of sheer fear of reputational damage. 
Eventually, this will lead to a virtuous cycle whereby a mechanism will evolve for quick resolution of liability litigation. 
One important reform in this direction would be to set up special adjudication mechanisms for disposal of liability cases along the lines of consumer courts or motor accident claims tribunals. 
As the saying goes, a journey of a thousand miles begins with a single step and, in our country, the journey towards decent safety standards is going to be long and arduous. It is a moot question whether civil society precedes or succeeds economic development; however, there can be no argument that it will take some form of pressure for the authorities to start paying attention to public safety and a plethora of compensation claims could set the process rolling. 
Insurance is not a panacea for all ills; however, eventually, with rising tide of such cases and increasing amounts of compensations, more and more establishments will take public liability insurance cover.
Alongside, insurance companies will force the establishments that buy such cover to pay more attention to the safety features and to have an SOP in place if an incident takes place. In that distant future, perhaps our municipal authorities may also be forced to pay more attention to basic safety engineering in public spaces!
(Shrirang Samant has worked in senior leadership roles in the general insurance industry, both in public and private sectors, in India and abroad. He has been privy to the transition of this industry from public to private sector in the country and was the founding CEO of a multinational insurance joint venture- JV in India.)
4 months ago
In a country that's drenched with red tape, maze of illogical rules and procedures, I don't think this will work. The only way to have insurers step in is to make it easy for them to do business. Less government. Less red tape. And more market incentives.

If insurers see a large number of victims, they will not step in because why should they? It's too risky a business model. On the other hand, if they price the insurance high enough (due to large number of cases), consumers will start whining (because most of them lack understanding of how insurance actually works -- aka low financial literacy). Quick resolution in India? Dream on!

More rules, more regulation = less profits, less tax, more problems, more useless products with crazy rules....I could go on. Just look at Obamacare in America -- it just made running a small business crazy expensive by having a maze of rules and mandates.

Having said this, I understand consumer protection is important and I'm not very sure how to address this problem (if at all it is a "problem"). Remember, Govt prioritises stuff -- they don't treat all problems equally. Some problems are more important than others, unfortunately. They have limited resources, limited time, limited mental real estate. The only solution for this is to have a market economy with minimal rules and regulation -- and allow the market to find solutions on its own instead of Govt having to step in all the time.
Pawan Duggirala
4 months ago
Public liability insurance should begin being mandated on a risk based approach to localities with poor infrastructure such as poor footpaths, poor roads, low hospital density, low / slow access to ambulances or fire engines, areas prone to flooding, residential localities with hazardous chemical storages, poor sanitation nearby and so on.
The cost of insurance to be shared between property taxes and private participation in insurance.
This will encourage betterment of these areas by developing a sense of ownership amongst citizens and active citizen participation in governance.
4 months ago
Thanks to Sucheta ji and Money Life for once again taking lead in bringing out need and importance People oriented services. Health, Safety are core for any person to live with dignity and secured life. There is hardly any responsibility and liability for citizens health and life, the companies, government all live in Denial. We need guidelines and liability fixed for helath and safety of all citizens specialy at public places and with insurance and health services.
4 months ago
Thank you. Very enlightening. Very far-sighted. Innovative and imaginative. If the objective of the article is achieved, India can upgrade its status to a civilised and developed country from that of a Banana Republic. I shall definitely send my views soon. I can't thank the MLF enough for what all you have done for me in getting my medical expenses reimbursed by the reluctant bank after my fall in their premises sometime ago. I am yet to become fully normal.
4 months ago
True, we leave each one to own. But along with law, we should ensure that the compensation authority consisting of experts in all fields is the final authority. Otherwise frivolous cases of compensation will flood and be an additional burden on the creaking legal system. Second is the funds for this. Like motor vehicle, all shops, companies should be charged a public liability insurance fee to pay. This is apart from negligence charge compensation to be paid in that pool in case companies or shops has not repaired a broken tile or such which caused the event.
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