(1)In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which-(a)is issued by a person who is an authorised insurer [or by a co-operative society allowed under section 108 to transact the business of an insurer] [Inserted by Act 100 of 1956 section 74 (w.e.f. 16-2-1957).], and(b)[ insures the person or classes of persons specified in the policy to the extent specified in sub-section (2)- [Substituted by the Motor Vehicles (Amendment) Act, 1969 (56 of 1969), Section 54 (w.e.f. 2-3-1970).](i)against any liability which may be incurred by him in respect of the death of or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place;(ii)against the death of or bodily injury to any passenger of a public service vehicle caused by or, arising out of the use of the vehicle in a public place]Provided that a policy shall not [* * *] [The words 'except as my be otherwise provided under sub-section (3)' omitted by Act 100 of 1956, section 74 (w.e.f. 16-2-1957).] be required-(i)to cover liability in respect of the death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment [other than a liability arising under the Workmen's Compensation Act, 1923,] [Inserted by section 74, Act 100 of 1956, (w.e.f. 16-2-1957).] in respect of the death of, or bodily injury to, any such employee-(a)engaged in driving the vehicle, or(b)if it is a public service vehicle, engaged as a conductor of the vehicle or in examining tickets on the vehicle, or(c)if it is a goods vehicle, being carried in the vehicle, or(ii)except where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment, to cover liability in respect of the death of or bodily injury to persons being carried in or upon or entering or mounting or alighting front the vehicle at the time of the occurrence of the event 'out of which a claim arises, or(iii)to cover any contractual liability.[Explanation. - For the removal of doubts, it is hereby declared that the death of or bodily injury to any person or damage, to any property of a third party shall be deemed to have been caused by or to have arisen out of, the use of a vehicle in a public place notwithstanding that the person who is dead or injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the accident occurred in a public place.] [Inserted by Act 56 of 1969, Section 54 (w.e.f, 2-3-1970).]
