(a) The policy of insurance should cover the liability incurred in respect of any one accident as follows:

a. In respect of death of or bodily injury to any person, the amount of liability incurred is without limit i.e. unlimited 

b. In respect of damage to any property of third party: A limit of Rs.6,000/-.

The liability in respect of death of or bodily injury to any passenger of a public service vehicle in a public place, the amount of liability incurred is unlimited.

(b) Section 140 of the Motor Vehicles Act 1988, provides for liability of the owner of the Motor Vehicle to pay compensation in certain cases, on the principle of “no fault”. 

The amount of compensation, so payable is as follows:

a. Rs.50,000/- for death, and 

b. Rs.25,000/- for permanent disablement of any person resulting from an accident arising out of the use of the motor vehicle.

(Note: The principle of “no fault” means the claimant need not prove negligence on the part of the motorist. Liability is automatic.)