Author: Tauseef Jawed, Student at School of Law, Alliance University, Bengaluru
Co-Author: Simran Surana, Student at School of Law, Alliance University, Bengaluru
Insurance is a contract between the indemnifier and the indemnified, where the indemnifier agrees to share the risks of the indemnified as per the terms of their contract in lieu of some consideration known as the premium amount. The Motor Vehicle Insurance is one of the most common types of Insurance, and the same is governed by the Motor Vehicle Act, 1939, and was recently amended in the year 2019. Under motor vehicles insurance, there is a concept called third-party risks, which denotes the risk of damage of either life or property of any person other than the parties to the Insurance contract. In India, third-party insurance has been mandated under the Motor Vehicle Act, 1939. One of the major reasons behind making third-party insurance mandatory for all motor vehicles was that to make sure that in case of an accident, if any third-party has been injured and the owner or driver of the vehicle does not have adequate wealth to compensate the injured third person, then the insurance company shall compensate them, besides this, it also aims to compensate the innocent victim of the road accident, who are at times walking pedestrians. This research paper attempts to analyze various contours of the third-party risks and liabilities in India, with reference to the related provisions under the Motor Vehicle Act, 1939. The Act was amended in the year 2019, and a number of changes were brought to the Act with an ultimate aim to make sure that the traffic rules and regulations are properly followed, an increase in penalties and also to make provisions for compensation to the victims of road accidents. The Act instructs the union government to establish Motor Vehicles Accident Fund for providing compulsory insurance to all drivers of India.
Keywords: Insurance, Indemnifier, Indemnified, Third-party, Risks.