Have you already purchased third-party motor insurance for your car or two-wheeler but now want protection for people travelling in your vehicle? Don’t worry! You don’t have to cancel your policy to add this cover.
The Insurance Regulatory and Development Authority of India (IRDAI) has clarified that existing policyholders can add legal liability cover for occupants or pillion riders during the currency of their third-party insurance policy.
Under the new provision, policyholders will have to pay an additional premium to obtain this cover. However, they must approach the same insurer that issued their existing third-party policy. They cannot approach another insurer to add this protection to their existing policy.
The additional cover will become effective from the date and time specified in the endorsement issued by the insurer.
This provision is part of IRDAI’s four-layer motor insurance policy structure, which will come into effect from December 15, 2026.
What does occupant liability cover mean for car and bike owners?
Occupant liability cover is an optional motor insurance cover that comes into play when a passenger travelling in an insured vehicle is injured or dies in an accident and the vehicle owner is held legally responsible.
Under the new motor insurance structure, legal liability to occupants or pillion riders falls under Section II. This is an optional cover that vehicle owners can purchase by paying an additional premium.
It covers the insured’s legal liability towards occupants travelling in a private car or pillion riders on a two-wheeler. Employees of the insured are also included under this section.
“For instance, if a passenger in a car is injured in an accident and the owner is held legally liable, this cover can help meet the resulting liability, as per the policy conditions,” says Atrey Bhardwaj, Chief Growth Officer, Probus.
It is worth distinguishing this from personal accident cover. Occupant liability cover protects the vehicle owner against eligible legal claims from passengers, while personal accident cover provides specified benefits to the individuals insured under it, he adds.
