Page 247 - Liability Insurance IC74

Guide for Liability Insurance

place within the covered territory and within the policy
period. This is a legal ability policy and negligence is
have to be proved to claim damages. The territory
covered generally would mean the country of operation,
or overseas if only the insured has an operating office
in that specific country. The Indian policies specifically
restrict the cause of action to Indian jurisdiction.

(ii) the insurance company has the right and duty to
defend the case. However, this right can be exercised
only when the law of the land permit the insurance
company to defend the case. In places where insurers
are not permitted to defend the case they are reimbursed
the costs for the same. This right to defend the case is
also known as the Duty to Defend Clause. The Indian
law does not permit insurers defending the case except
where statutorily provided , e.g Motor Third Party. Thus,
in India the cause of action is between the insured and
the claimant and the Duty to Defend Clause is not
implemented.

Exclusion: (i) expected or intended injury -deliberate
damages are not covered. However, cover for damages
and injury occurring when force is used to protect
persons or property, is allowed.

(ii) contractual liability is excluded - insurance contract
coverage to persons or defending a liability cover the

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