The lift in your building: who pays when it fails

Almost every residential building above four floors in urban India depends on a lift, and almost none of the residents know who carries the risk when one stops between floors, drops, or injures somebody. The answer is usually the society - and the society is often uninsured for exactly that.

Two different covers, frequently confused

Lift third-party liability cover responds when a person is injured or property is damaged through the use or operation of the lift, and the owner is held legally liable. It covers the machinery, the plant, the doors, the safety devices and the associated appliances, and it pays compensation to the injured party along with legal costs.

Machinery or equipment breakdown cover is a different product entirely. It pays to repair or replace the lift itself when it fails due to mechanical or electrical breakdown - motor burnout, controller failure, rope or brake damage. It says nothing about injuries to people.

One cover pays the person who was hurt. The other pays for the lift. A building generally needs both.

Why the gap exists

Most societies buy a building policy covering the structure against fire and natural perils, and stop there. Liability arising from common-area equipment is usually an extension or a separate policy, not something included by default. Meanwhile the annual maintenance contract with the lift vendor covers servicing and parts, not third-party compensation, and vendor liability is typically capped at a level well below what a serious injury claim would cost.

The result is a genuine gap. When something goes wrong, the society's managing committee - often volunteers - discovers that the responsibility sits with them personally in a way nobody had considered.

What a housing society programme usually contains

Structure and common-area cover for the building itself. Public liability for the premises generally, extending to visitors, delivery staff and residents. Lift third-party liability. Equipment breakdown for lifts, pumps, generators and fire systems. Cover for the society's office equipment and records. Where staff are employed directly, workmen's compensation for guards, cleaners and lift operators.

Fidelity guarantee is worth mentioning too - societies handle substantial maintenance collections, and misappropriation by a person handling the funds is a real and insurable exposure.

What this means for an individual flat owner

Your own home policy covers your flat. It does not cover the lift, the lobby, the pump room or the compound wall, and it does not respond to a liability arising from common-area equipment. Those belong to the society's programme.

It is a reasonable thing to raise at a general body meeting: ask to see the society's policy schedule, check whether lift liability appears on it by name, and check when the sums insured were last revised. Building reinstatement costs have moved considerably in recent years, and many society policies are running on figures set a decade ago.

Standard exclusions apply as they do elsewhere - war, nuclear perils, and in some wordings riot, strike, earthquake and flood unless specifically added back. Those add-backs are usually inexpensive and worth requesting.