Meeting your insurance needs in the UAE

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Aldous Fleming
5 years ago
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1 UAE Business Setup Guides Meeting your insurance needs in the UAE

2 Index Meeting your specific 4 insurance needs Quick facts 3 Where to go to meet your 9 insurance needs Understanding your insurance responsibilities 1

3 Understanding your insurance responsibilities As a general rule, the insurance needs of any small business can be split into three categories: Employees, assets and liabilities. Within these categories are a number of different provisions some that are suitable for all and others that are only necessary for specific types of business. Employees: Since June 30, 2016, health insurance for all Dubai visa holders has been mandatory, so this must be offered to all foreign workers as a bare minimum. On top of this, many businesses may also offer their staff comprehensive life and travel insurance policies depending on the type of work they are undertaking. Finally, many free zones require employers to take out workmen s compensation insurance. Assets: After its people, a company s assets are its most valuable resource particularly to small businesses that would struggle to meet repair or recovery costs. 1

4 Understanding your insurance responsibilities Asset insurance takes many forms from the basic property cover of buildings and contents, to compensation for business interruption and company-specific requirements such as fleet or marine insurance. Liabilities: Liability cover falls predominantly into three categories: Public liability insurance, product liability insurance and professional indemnity insurance. In essence, public liability insurance protects the business from third-party claims such as injury or loss; product liability insurance protects the business against claims made due to unsafe or malfunctioning products; professional indemnity insurance protects business owners in the event of any claims of professional negligence. 2

5 Quick facts It s possible to insure against most common risks to businesses in the UAE. Many types of insurance are mandatory under UAE law including car insurance and health insurance. The price of insurance varies based on the size of the risk to be insured and the benefits that are included in the cover. There are over 50 insurance companies operating in the UAE, each specialising in their own preferred segments. The insurance industry in the UAE is regulated by a federal body: The Insurance Authority. 3

6 Meeting your specific insurance needs Mandatory cover Ensuring your business insurance needs are met starts with establishing that all mandatory cover is in place. This personal and business insurance includes health insurance (in Dubai and Abu Dhabi), and (depending on the location of your business) motor insurance, workmen s compensation, and public liability insurance cover may also be required. Health insurance: From June 30, 2016, all Dubai businesses are now required to follow in the footsteps of their Abu Dhabi-based counterparts and include mandatory health insurance for all expat employees. As a bare minimum, this must cover the following: An annual claim limit of at least Dh150,000 per person. Full cover for pre-existing and chronic conditions subject to a six-month waiting period if the insured was not previously covered for the condition in the UAE. All in-patient treatment covered with a 20% excess, up to a maximum of Dh500 per visit, to a maximum of Dh1,000 per year. 4

7 Meeting your specific insurance needs All outpatient treatment again covered with a 20% excess. Cover for cost of medicine of at least Dh1,500 per person. A range of maternity services, including both in- and outpatient services; cost of delivery up to Dh7,000 for normal delivery, and up to Dh10,000 for C-section all covered with a 10% excess. It should be stressed that this is the minimal level of cover than must be provided to all expat employees and the Dubai Health Authority actively encourages businesses to offer additional health insurance benefits. Motor insurance: If you have any kind of business vehicle or fleet it must, by law, be insured. The exact type of cover required will depend on your industry as well as the type of vehicle/s in use. Public liability insurance: Broadly speaking, this type of insurance covers your business against any third-party claims that come about as a result of negligence, injury, damage or loss. Public liability insurance is compulsory in many free zones. 5

8 Meeting your specific insurance needs Workmen s compensation insurance: The UAE labour law requires all employers to provide compensation to their employees in the event that they are injured or die due to a work-related cause. It is therefore advisable to take out an insurance policy to cover this and in fact in many free zones it is mandatory to do so. A standard workmen s compensation policy covers the employer against compensation costs as a result of the injury or death of a member of staff. Many employers also choose to cover medical expenses that result from workplace injury as part of a comprehensive workmen s policy. Many others go a step further and offer full life insurance policies which pay out to an employee s named next-of-kin in the event of death by any cause. Additional cover UAE-based businesses may also have to take out additional insurance depending on their industry or due to the specific requirements of their customers. It is not uncommon for certain customers to require that any company they deal with has a professional indemnity policy in place to protect all parties against losses as a result of negligence, for example. 6

9 Meeting your specific insurance needs Other insurance that may be required depending on your business and industry include: Property insurance: This is a very straightforward insurance policy that protects businesses against damage or loss of buildings and their contents including stock, machinery and any other business equipment or property. Premises liability: While often covered by a public liability policy, for some types of businesses it may be required to take out additional premises liability to insure against third-party claims made as a result of injury caused by or suffered on business premises or to its neighbours. This may include a trip or fall caused by uneven or wet ground, poor lighting, improper security and so on. Marine insurance: For any business with a fleet that includes marine vessels or cargo, insurance is a must. Cargo insurance covers the actual property being shipped, while hull insurance covers the marine vessel. 7

10 Meeting your specific insurance needs Fidelity guarantee insurance: Businesses whose employees have access to physical cash or other expensive assets may find that they need a fidelity guarantee policy. This insurance protects companies from the financial impact of fraud, theft and dishonesty. A standard fidelity guarantee policy will protect against embezzlement and misappropriation, forgery and falsification of documents, and stealing and larceny. 8

11 Where to go to meet your insurance needs With over 50 insurance companies each offering varying types and levels of cover, the process of ensuring your insurance needs are met efficiently and cost-effectively is not always easy. That s why the first port of call when ensuring that you are suitably covered is usually to engage the services of a broker or industry expert. Brokers will be able to search across a range of policy providers for you, meaning you only need to give details of your requirements once. Before taking such a step, many companies find it useful to open discussions with businesses of a similar type and size to get a feel for what is required before starting any conversations. If you would rather do the research into providers yourself, the internet is of course a valuable tool to explore what is available and at what cost. You can then approach your chosen insurer directly. For those who would rather do everything online, there are many online-only service providers that can take you from initial contact through to full cover over only and phone if necessary. 9

12 Ready to get started? Virtuzone has helped thousands of businesses stay compliant and meet their insurance needs and much more. Find out why we are the UAE company setup experts by getting in touch with us today. Phone : info@vz.ae Office 404, Building B, Al Saaha Offices Souk Al Bahar - Old Town Island Burj Khalifa District, Dubai United Arab Emirates Drop-in hours: 9:00 AM 6:00 PM For a comprehensive look at the types of business cover available, InsuranceMarket.ae is the online brand of AFIA Insurance Brokers any business owner s one-stop-shop for all types of personal and business insurance requirements.

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