Page 131 - Liability Insurance IC74

Guide for Liability Insurance

one of the units had resulted in personal injury is to a
number of persons. The Supreme Court considered what
should be the measure of liability of an enterprise which
is engaged in hazardous industry.

The Court decided to evolve its thought process and
therefore evolved a new principle of liability. It was
decided that an enterprise which is engaged in hazardous
industry and poses a potential threat to the health and
safety of the persons working in the factory and residing
in the surrounding areas, owe an absolute and non-
delegable duty to the community to ensure that no harm
results to any one on account of hazardous nature of
the activity it has undertaken.

The enterprises must be absolutely liable to compensate
for such harm and cannot defend by stating that it had
taken all reasonable care and that the harm of a without
any negligence on its part. The Court further observed
that the measure of compensation must be co-related
to the magnitude and the incapacity of the enterprise
because such compensation must have a deterrent
effect. The large and prosperous the enterprise, the
greater must the amount of compensation payable by it
for the harm caused on account of the accident any the
carrying on of the hazardous activity by the enterprise.

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