Republic of the Philippines
House Or REPRESENTATIVES
‘Quezon City, Metro Manila

Fifteenth Congress
First Regular Session

HOUSE BILL NO. 41 3f
Introduced by Honorable Erico B. Aumentado

EXPLANATORY NOTE

This bill seeks to require the owners and operators of establishments,
enterprises, public utilities and services, buildings, machineries and their
accessories to secure public liability insurance to ensure that compensation,
(ance or restitution shall be paid in case of death or personal injury to
customers or third persons or damage to property while within the
‘8 premises because of the business operations.

The growth of industries, commercial and business has increased the
ks from accidents not only to the employees of the
s establishments but also to the general public who may
be within the premises. The people who suffer accidents in these
establishments are very often ordinary citizens. They suffer because of
d relief and compensation. While the workers and employees of these
ishments are protected under separate laws, members of the public are
not assured of any relief except through legal processes. To ameliorate the
sufferings of the public due to these accidents, it is essential to provide for
mandatory public liabifity insurance.

Public liability insurance is designed to compensate the victims. ‘This
compensation can cover loss of earnings or of future earnings and damages
in addition to the legal cost in defending the claims and the legal costs that
the establishments may incur if found guilty. Public liability insurance can
also cover claims by the victims who have suffered injury or damage to
property in connection with the operation of a particular business.

Bill Drafting Service


Today, there is no law that provides mandatory public liability
insurance. Hence, the only remedy available to the victims is to go through
prolonged litigations in a court of law. It is essential, therefore, to require
mandatory public liability insurance from the owners and operators of
industries, business or commercial establishments to provide not only
minimum but also immediate relief to the victims.

The main features of this proposed measure are the following:
a) It provides for a public liability insurance to cover the payment

of claims made by members of the public who have suffered injury or
damage to property in connection with the operations of the business; and

b) The owners and operators of the business establishments have
to compulsorily insure themselves to be able to pay compensation for death,
injury, medical expenses and damage to property on a no-fault liability basis
while preserving the right of the injured to claim additional compensation
under other existing laws.

In view of the foregoing, approval of this bill is earnestly sought.



Republic of the Philippines

House Or RepresENTATIVES
Quezon City, Metro Manila

Fifteenth Congress
First Regular Session

HOUSE BILL NO. _4130

Introduced by Honorable Erico B. Aumentado

AN ACT

PROVIDING FOR MANDATORY PUBLIC LIABILITY
INSURANCE TO GIVE IMMEDIATE RELIEF TO PERSONS
AFFECTED BY ACCIDENTS ARISING FROM OR INCIDENTAL
TO THE OPERATIONS OF BUSINESS OR COMMERCIAL
ESTABLISHMENTS, ENTERPRISES, PUBLIC UTILITIES AND
RVICES, BUILDINGS, MACHINERIES AND — THEIR
AC SORIES AND PROVIDING PENALTIES FOR VIOLATION
THEREOF

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

SECTION 1. Short Title. —

is Act shall be known as the “Public
Liability Insurance Act.”

SEC. 2. Declaration of Policy. ~ \t is hereby declared the policy of
the State to promote the welfare and general well-being of the public by
providing ample and immediate compensation to all victims of accidents or
disasters occurring on account of or incidental to the operations of business
establishments or enterprises. Towards this end, the State shall require the

owners or operators of establishments, enterprises, public utilities and

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services, buildings, machineries and their accessories to secure public
liability insurance to ensure that compensation, assistance or restitution shall
be paid in case afdeathior personal injury to any customers or third persons,
or damage to property while within the business premises because of the
business operations.

SEC. 3. Definition of Terms. — As used in this Act:

a) Commissioner refers to the head of the Insurance Commission;

b) — Owner refers to the person who owns, operates or controls the
business establishment, utility or service, building, machinery and their

accessories, and include:

i. in the case of a partnership, any of its partner

ii in the case of an as

ociation, any of its officers; and

iii, in the e

se of a corporation, any of its directors, managers, or

other officers who is

directly in charge of, and is responsible to
the company for the conduct of the business of the company;

c) Public liability insurance refers to the insurance that covers

legal liability for death of, or injury to, any person or persons or damage to

property of others while in the course of operating a business.

SE

4. Public Liability. — 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 opezations of establishments, enterprises,

public utilities and services. buildings, machineries and their acc2ssories, 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.

In any claim for relief under this Act, the claimant shall not be
required to plead and establish that 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.

For purposes of this Act, injury shall include permanent total or
permanent partial disability or sickness resulting out of an accident

Ss

. 5. Liability Insurance. ~ Before the start of any operation of a
business, enterprise, establishment, public utility or service, building,
machinery and their accessories, the owner shall take out one or more public
liability insurance to ensure that compensation will be paid in case of death
of, or personal injury to, any person or damage to property by reason of the

operation of the business or enterprise.

‘The owner of any business which is already existing before the
effectivity of this Act, shall take out such insurance policy or poticies within
one year from the effectivity of this Act.

The owner shall renew the insurance policy before the expiry of the

period of validity thereof so that it shall remain in force throughout the

period of business operations.


SEC. 6. Liability Coverage. — The insurance policy shall cover
liability for death or bodily injury arising from the operations of the business
in the amount of not less than Fifty thousand pesos (P50,000.00) per person.
‘The liability insurance coverage for damaged property shall not exceed the
value of the property.

‘The total liability of owners or operators shall not exceed the amount
of the paid up capital of their undertaking or the market value of all assets
and stocks of the undertaking on the date of the contract of insurance.

SEC. 7. Prerequisite to Business Permit. ~ Government regulatory
agencies shall not vette necessary business permit to operate, which
includes the registration or renewal of registration, to the owner or operator

of business

lishment, enterprise, public utility or service, building,
machinery and their accessories, without the policy of public liability
insurance required by this Act.

SE

C. 8. Guidelines for Insurance Coverage. — the insurance

companies shall be bound by the following guidelines:

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

b) No owner or operator shall be unreasonably denied the policy
of public utility insurance as required by Section 5 of this Act by the

insurance companies authorized to issue the same:


¢) Incase of denial of insurance coverage, the Commissioner shall
require from the 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;

4) The insurance company may not issue the policy of public

liability insurance under this section unless so authorized under existing
Jaws; and

©) The authority to engage in the casualty line of business of an

insurance company that refuses to issue or renew, without just cause, the

insurance policy therein required shall be withdrawn immediately.

SEC. 9. Government Agencies Exempted. ~ The National
Government, the local government units, or any subdivisions, agency or
instrumentality thereof, including government-owned or controlled
corporations or their subsidiaries shall be exempted from the coverage of
this Act.

S|

C. 10. Application for Claim for Relief. ~ 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 insofar as can fairly be
ascertained.

An application for claim for relief may be made:


a) by the person who has sustained the injury:

b) by the owner of the property to which the damage has been
caused:

c) where death has resulted irom the accident, by all or any of the
legal representatives of the deceased: or

d) by any agent duly authorized by such person or owner of such
property or all or any of the legal representatives of the deceased: 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 all legal representatives of the deceased and the legal
representatives who have not so joined shali be impleaded as respondents to
the application.

SEC. 11. Procedures Governing the Applications for Claim for
Relief. — In the application for claim for relief, the claimant shall be guided
by the following:

a) Every application under Section 10 shall be made to the insurer
and shall be in such form, contain such particulars and shall be accompanied
by such documents as may be prescribed: Provided, however, That no
application for relief shall be entertained unless it is made within five (5)
years from the occurrence of the accident:

b) 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

6


and every endeavour shall be made to dispose of such claim within three (3)
months from the receipt of the application for relief under the second
paragraph of Section 10 herein;

c) The right to claim relief under Section 4 of this Act 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 corapensation in respect thereof under any
other law for the time being in force:

d) Notwithstanding anything contained in the immediately
preceding subsection (c), where in respect to death of, or 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;
and

€) Action or suit for recovery of damage due to loss or injury must
be brought in proper cases, before the Commissioner or the courts within one

year from denial of the claim, otherwise the claimant’s right of action shall

prescribe.

. 12. Award of Relief. — On receipt of an application under
Section 10 of this Act. 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 be just and specifying the
person or persons to whom such amount of relief shall be paid.

The insurer shall arrange to deliver copies of the award to the parties
concerned expeditiously and in any case within a period of fifteen (15) days
from the date of the award.

In case of any dispute in the enforcement of the provisions of ai

policy issued pursuant to this Act, the adjudication of such dispute shall be
within the original and exclusive jurisdiction of the Insurance Commission

subject to the limitations provided in Section 416 of the Insurance Code of

the Philippines.

In holding any inquiry under the preceding paragraph, the
Commission may, subject to any rules made on its behalf, follow such
summary procedure as it may deem fit and proper. ‘The Insurance
Commission shall have all the powers of a civil court for the purpose of

taking evidence on oath and of enforcing the attendance of witnesses and of

compelling the discovery and production of documents and ma

jal objects
and for such other purposes as may be prescribed.

SEC. 13. Implementing Rules and Regulations. — ‘The

mmissioner of the Insurance Commission shall, in coordination with the
Secretaries of Trade and Industry, issue rules and regulations necessary for

the effective implementation of this Act.


SEC. 14. Penalties. — Any owner of business and commercial
establishment, enterprises, public utilities. and services, buildings,
machineries and their accessories, who shall fail to take out public liability
insurance in violation of this Act shall be punished with imprisonment of not
less than two (2) years but not more than five (5) years, or a fine of not less
than Ten thousand pesos (P10,000.00) but not more than Fifteen thousand

pesos (P 15,000.00), or both, at the discretion of the court.

Any insurer who violates any provision of this Act shall be punished
with imprisonment of not less than three (3) years but not more than six (6)
years, or a fine of not less than (P15,000.00) but not more than Twenty
thousand pesos (P20,000.00), or both, at the discretion of the court.

If the offender is a corporation, partnership or juridical person, the
penalty shall be imposed on the officer or officers responsible for permitting
or causing a violation by the corporation, partnership or juridical person of
the provisions of this Act.

SEC. 15. Separability Clause. ~ If for any reason, any provision of
this Act is declared unconstitutional or invalid, parts of provisions of this
Act which are not affected shall continue to be in full force and effect

SEC. 16. Effectvity — This Act shall take effect fifteen (15) days
after its publication in the Official Gazette or in two (2) national newspapers

of general circulation.

Approved,