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III IC-99 study materials
III IC-99 study resources

III IC-99: Casualty and Liability Insurance Coverages

III IC-99 · Work through your exam, one topic at a time.

All guide sections

Casualty and Liability Insurance Coverages

Scope

This domain tests legal liability: how it arises at common law or by statute, which policy responds, and how liability limits and trigger clauses work. Scenario questions on claims-made versus occurrence are frequent.

Core rules

  • Negligence requires a duty of care, breach, causation and damage. Vicarious liability makes an employer or principal answerable for others. Strict/absolute liability applies to hazardous activity and to statutory no-fault regimes.
  • Statutory liabilities: motor third-party liability is compulsory under Section 147, Motor Vehicles Act 1988 (unlimited for death/bodily injury; ₹7.5 lakh for property damage; ₹15 lakh personal accident cover for owner-driver). The Employees' Compensation Act, 1923 fixes employer liability for work injuries; the Public Liability Insurance Act, 1991 imposes no-fault liability on handlers of hazardous substances.
  • Covers: public liability, products liability, professional indemnity (errors and omissions), directors' and officers' (Side A, B, C), employers' liability, and cyber liability.
  • Occurrence policies respond to injury/damage happening during the policy period; claims-made policies respond to claims first made during the period, subject to a retroactive date.
  • Limits: any-one-accident/claim and aggregate; defence costs inside or outside the limit; cross-liability and contractual liability wordings.

Worked example

A D&O policy for 2024 is claims-made with a retroactive date of 1 April 2022. A shareholder action filed in November 2024 alleges wrongful acts by directors in 2019. Reasoning. The claim was first made during the 2024 policy period, so the trigger is satisfied; but the alleged acts pre-date the retroactive date, so the claim falls outside cover. If the retroactive date had been "inception" (2019 or earlier), it would respond.

Traps

Assuming public liability covers employees (employee injury is excluded). Treating contractual liability as automatically covered. Reading a claims-made policy as occurrence-based. Ignoring defence-cost sub-limits.