Page 127 - Liability Insurance IC74

Guide for Liability Insurance

If the insured is legally liable to pay damages to others,
the policy will indemnify him subject to the terms,
conditions and limitations of the contract. Indemnity is
also available in respect of legal costs awarded against
the insured as well as legal costs & expenses incurred
by the insured with the written consent of the insurers
in the defense or settlement of claims.

The maximum limit of liability under the policy is stated
as limit of indemnity - AOA and AOY. Indemnity is also
subject to compulsory excess, wherever provided and
also to voluntary excess, if any.

Under compulsory Public Liability Policy, the limit per
person as prescribed in the Act, will also apply. It can
be observed that the payment is made on behalf of and
through the insured to persons other than the insureds,
i.e third parties or employees, as the case may be, and,
as such, the Insured has no direct financial interest in
the claim settlement.

Therefore, the application of the principle of indemnity
in liability insurance is simple and straight forward
without any complications. In employer's liability policies
no limit of indemnity is specified. These policies provide
indemnity in respect of the Insured's liability under

Sashi Publications - www.sashipublications.com 123

Copyright@ The Insurance Times. 09883398055 / 09883380339