law: Public Liability Insurance Act, 1991
  4. Duty of owner to take out insurance policies 
  (1) Every owner shall take out, before he starts handling any
  
  hazardous substance, one or more insurance policies providing for contracts of
  
  insurance whereby he is insured against liability to give relief under
  
  sub-section (1) of section 3:
  PROVIDED that any owner handling any hazardous
  
  substance immediately before the commencement of this Act shall take out such
  
  insurance policy or policies as soon as may be and in any case within a period
  
  of one year from such commencement.
  (2) Every owner shall get the insurance policy, referred to in sub-section
  
  (1), renewed from time to time before the expiry of the period of validity
  
  thereof so that the insurance policies may remain in force throughout the
  
  period during which such handling is continued.
  2[(2A) No insurance policy taken out or renewed by an owner
  
  shall be for an amount less than the amount of the paid-up capital of the
  
  undertaking handling any hazardous substance and owned or controlled by that
  
  owner, and more than the amount, not exceeding fifty crore rupees, as may be
  
  prescribed.
  Explanation: For the purposes of this sub-section,
  
  "paid-up capital" means, in the case of an owner not being a company,
  
  the market value of all assets and stocks of the undertaking on the date of
  
  contract of insurance.
  (2B) The liability of the insurer under one insurance policy
  
  shall not exceed the amount specified in the terms of the contract of insurance
  
  in that insurance policy.
  (2C) Every owner shall also, together with the amount of
  
  premium, pay to the insurer, for being credited to the Relief Fund established
  
  under section 7A, such further amount, not exceeding the sum equivalent to the
  
  amount of premium, as may be prescribed.
  (2D) The insurer shall remit to the authority specified in
  
  sub-section (3) of section 7A the amount received from the owner under
  
  sub-section (2C) for being credited to the Relief Fund in such manner and
  
  within such period as may be prescribed and where the insurer fails to so remit
  
  that amount, it shall be recoverable from the insurer as arrears of land
  
  revenue or of public demand.]
  (3) The Central Government may, by notification, exempt from the
  
  operation of sub-section (1) any owner, namely:-
  (a) the Central Government;
  (b) any State Government;
  (c) any corporation owned or controlled by the
  
  Central Government or a State Government; or
  (d) any local authority:
  PROVIDED that no such order shall be made in relation
  
  to such owner unless a fund has been established and is maintained by that
  
  owner in accordance with the rules made in this behalf for meeting any
  
  liability under sub-section (1) of section 3.