Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH Congress
First Regular Session

nouse BL No._ 1946

Introduced by HONORABLE BENHUR L. SALIMBANGON

EXPLANATORY NOTE

This bill seeks to provide insurance to persons affected by accident arising from the
operation or incidental to the operation of establishments, enterprises, public utilities and
vehicles, buildings, machineries, and their accessories in order to provide the victims immediate
relief and compensation for the loss and damage sustained

The Philippines, over the years has been affected by several major disasters and tragedies
claiming hundreds of lives and causing much destruction to lives and properties. In times of
disasters and tragedies, the determination as to who should be held primarily liable for the loss of
lives and damage to properties is often left unanswered and no one is held accountable and liable
for the loss and destruction. As a result, families of those lives which were unnecessarily wasted
and the victims themselves are always at a loss and rendered helpless.

When these tragedies happen, event organizers, owners, operators, developers and/or
contractors, public utilities, business establishments, buildings, and other facilities used by or
that affect the public would immediately escape liability by attributing the disaster or tragedy as
an “act of God’ or force majeure notwithstanding the fact that human error, neglect,
recklessness, omission, lack of foresight, adequate knowledge, and skills are attendant to the
happening or event.

In order to deter the happening of similar tragedies and disasters, a law should be passed
that will hold owners and operators as well as organizers of events directly and primarily liable
for injuries and damages arising from the operation or incidental to the operation of their
enterprises, establishments, properties, personnel, and their accessories. Said law should also
require all organizers of events, and owners and operators of business establishments, public
utilities and services, buildings, machineries, and their accessories to have mandatory public
liability insurance to pay for injuries and damages arising from the operation of the above. The
State, under the principle of parens patriae can require owners of establishments to take
responsibility to ensure that no damage or injury will happen to any person or property.



Therefore, approval of this bill is earnestly recommend

BENHUR L. SALIMBANGON


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 1946

Introduced by HONORABLE BENHUR L. SALIMBANGON

AN ACT PROVIDING FOR PUBLIC LIABILITY INSURANCE FOR THE PURPOSE OF
PROVIDING IMMEDIATE RELIEF TO PERSONS AFFECTED BY ACCIDENT ARISING
FROM THE OPERATIONS OR INCIDENTAL TO THE OPERATIONS OF
ESTABLISHMENTS, ENTERPRISES, PUBLIC UTILITIES, AND VEHICLES, BUILDINGS,
MACHINERIES, AND THEIR ACCESSORIES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

Section 1. Short Title. This Act shall be known as “The Public Liability Insurance Act”,

Section 2. Declaration of Policy. It is hereby declared the policy of the State to’

(a) Promote the welfare and general well-being of the public by providing ample protection
to all victims of accidents or disasters occurring on account of the operations of business
establishments or enterprises

(b) Ensure that immediate compensation or relief’ be provided to victims of accidents due to
operations or incidental to the operations of establishments, enterprises, public utilities,
buildings, machineries and their accessories

(©) Ensure the accountability of owners or operators of establishments, enterprises, public
utilities and vehicles, buildings, machineries and their accessories by requiring them to
have in place public utility insurance which ensure that compensation, assistance, or
restitution be paid in respect of death of, or personal injury to, any person or persons or
damage to property due to their business or operations or incidental thereto

Section 3, Definition of Terms. As used in this Act, the term:


(a) Accident ~ refers to an accident involving a fortuitous, sudden or unintentional
occurrence sometimes due to negligence resulting in death of, or injury to, any person or
damage to any property

(b) Commissioner ~ refers to the commissioner of the Insurance Commission

(©) Injury — includes permanent total or permanent partial disability or sickness resulting out
of an accident

(d) Owner - means the person who owns, operates, or has control over the business
establishments, public utilities and services, buildings, machineries and their accessories,
and includes:

In the case of the firm, any of its partners
In the case of an association, any of its members, and

In the case of a company, any of its directors, managers, secretaries or other officers
who is directly in charge of, and is responsible to the company for the conduct of the
business of the company

(e) Public liability insurance - insurance that covers the insured persons legal liability for
death of, or accidental bodily injuries to any person or persons or damage to property of
others while in the course of doing business

Section 4. Liability to Give Relief in Certain Cases on Principles of No Fault

(a) Where death or injury to any person or damage to any property has resulted from an
accident arising from the operations or incidental to the operations of establishments,
enterprises, public utilities and vehicles, buildings, machineries and their accessories, the
owner shall be liable to give such relief as specified in the schedule of indemnities to be
set forth by the Insurance Commissioner for such death, injury, or damage

(b) In any claim for relief under this Act, the claimant shall not be required to plead and
establish the death, injury, or damage to property in respect of which the claim has been
made was due to any wrongful act, neglect, or default of any person

(©) Injury shall include permanent total or permanent partial disability or sickness resulting
out of an accident

Section 4. Duty of Owner to Take Out Public Liability Insurance Policies

(a), Every owner shall take out, before he starts operation of his business, enterprise,
establishment, public utilities and vehicles, buildings, machineries and/or their accessories, one
or more public liability insurance policies which ensure that- compensation will be paid in respect
of death of, or personal to, any person or damage to property by reason of the operation of his
business or enterprise or incidental thereto. Such policies should provide contracts of insurance
whereby the owner is insured against liability to give relief under Section 4 of this Act.


Provided that any owner already in business immediately before the effectivity of this Act shall
take out such insurance policy or policies within one year from such effectivity.

(b). Every owner shail get the insurance policy referred to in sub-section (a), 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 business operation is continued.

(©). the insurance policy taken out or renewed by an owner shall cover liability for death or
bodily injuries arising out from the operations of the business or incidental thereto in the amount
not less than Fifty Thousand Pesos ( P50,000.00) per person per accident. Liability insurance
coverage for damaged property shall be to the extent of the owner's insurable interest thereof but
not to exceed the value of the property.

Th no way under any of the circumstances mentioned above should the total liability of
‘owners/operators exceed the amount of the paid up capital of their undertaking

For the purpose of this 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 the contract
of insurance.

(@) The appropriate regulatory government agency shall not allow the issuance of the necessary
business permits to operate, to include the registration or renewal of registration as the case may
be, to owner or operator of business establishments, enterprises, public utilities and vehicles,
buildings, machinery and their accessories without first requiring from the owner or operator the
presentation and filing of a substantiating document in a form approved by the Commissioner
evidencing that the policy of public liability insurance required in this Act is in effect

(e) Any owner or operator who intentionally contravenes subsection (a) of this Section shall be
guilty of an offense punishable on conviction by imprisonment for a period of not more than two
(2) years, or by a fine not exceeding Five Hundred Thousand Pesos (P500,000.00) or both
without prejudice to the closure of the business or enterprise.

(© Where an offense under this provision has been committed by an instrumentality of the State,
the head of such office or the local chief executive shall be deemed guilty of the offense and
shall be liable to be proceeded against and punished accordingly

Nothing in this Section shall render such head of office or the local chief executive liable for an
offense provided he/she proves the offense is committed without his/her knowledge or that he
exercised extraordinary diligence to prevent the commission of such offense

Section 6. Duty of Insurers or the Insurance Companies

a. The liability of the insurer under an insurance policy shall not exceed the amount
specified in the terms of the contract of insurance in that insurance policy.



b. No owner or operator shall be unreasonably denied the policy of public liability insurance
as required by Section S hereof by the insurance companies authorized to issue the same
Otherwise, the Commissioner shall require from said owner or operator in lieu of the
insurance policy, a certificate that a cash deposit has been made with the Insurance
Commission in such amount to be required by the Commissioner as limits of indemnity
for the legal liabilities of the owner pursuant to this Act.

c. No insurance company may issue the policy of public liability insurance under this
section unless so authorized under existing laws

d. The authority to engage in the casualty line of business of an insurance company that
refuuses to issue or renew, without just cause, the insurance policy therein required shall

be withdrawn immediately

Section 7. The National Government may, by appropriate legislation, exempt from the
operation of sub-section (a) of SectionS hereof any owner, namely:

The local government units
Local government units

Any corporation owned or controlled by the government
Any local authority

aogce

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 rule made in this
behalf for meeting any liability under sub-section (a) of Section (4)

Section 8. Application for Claim for Relief

(a) In the settlement and payment of relief under this Act, the indemnity shall not be
availed of by any accident victim or claimant as an instrument of enrichment by
reason of an accident, but as an assistance or restitution in so far as can fairly be
ascertained

(b) An application for claim for relief may be made

1. Bythe person who has sustained the injury

2. By the owner of the property to which the damage has been caused

3. Where death has resulted from the accident, by all or any of the legal
representatives of the deceased

4, By any agent duly authorized by such person or owner of such property or all or
any of the legal representatives of the deceased, as the case may be

Provided that where all the legal representatives of the deceased have not joined in any
such application for relief, the application shall be made on behalf of or for the benefit of the
legal representatives of the deceased and the legal representatives who have not so joined shall
be impleaded as respondents to the application



(c) Every application under sub-section b shall be made to the insurer and shall be in such
form, contain such particulars and accompanied by such document as may be
prescribed by the Commissioner

(d) No application for relief shall be entertained unless it is made within five years from
the occurrence of the accident

(e) A claim for relief in respect of death of, or injury to, any person or damage to any
property shall be disposed of as expeditiously as possible and every endeavor shall be
made to dispose of such claim within three months from the receipt of the application
for relief under sub-section b

(f) The right to claim relief under sub-section a of section 4 hereof in respect to death of,
or injury to, any person or damage to any property shall be in addition to any other
right to claim compensation in respect thereof under any other law for the time being,
in fore

(g) Notwithstanding the immediately preceding subsection f, where in respect of death of,
oF injury to any person or damage to any property, the owner, liable to give claim for
relief, is also liable to pay compensation under any other law, the amount of such
compensation shall be reduced by the amount of relief paid under this Act

(h) An action or suit for recovery of damage due to loss or injury must be brought in
proper cases, with the Commissioner of the Courts within one year from denial of the
claim, otherwise the claimant’s right of action shalll prescribe

Section 9. Award of Relief

a. Upon receipt of an application under sub-section b of Section 8, the insurer shall,
after giving notice of the application to the owner and after giving the parties an opportunity to
be heard, hold an inquiry into the claim or each of the claims, and may make an award
determining the amount of relief which appears to him to be just and specifying the person or
persons to whom such amount of relief shall be paid

b. The insurer shall arrange to deliver copies of the award to the parties concerned
expeditiously and in any case within a period of fifteen days from the date of the award

c. In case of any dispute in the enforcement of the provisions of any policy issued
pursuant to this Act, the adjudication of such dispute shall be within the original and exclusive
jurisdiction of the Commissioner , subject to the limitations provided in Section 416 of the
Insurance Code of the Philippines

d. In holding any inquiry under sub-section c, the Commissioner may, subject to any
rules made on this behalf, follow such summary procedure as he thinks fit


e. The Commissioner shall have all the powers of a Civil court for the purpose of taking
evidence in oath and of enforcing the attendance of witnesses and of compelling the discovery
and production of documents and material objects and for such other purposes as may be
prescribed

£ The Commissioner shall issue such orders, guidelines, rules, and regulations as may be
necessary to carry out the provisions of this Act within six months from the passage hereof.

Section 10. Separability Clause. If any provisions of this Act or the application thereof to
any person or circumstance are held invalid, the remaining provisions of this Act and the
application of such provisions to other persons or circumstances shall not b ¢ affected thereby.

Section 11. Effectivity. This Act shall take effect after fifteen (15) days from its
publication in the Official Gazette and in a newspaper of general circulation.

Approved,