One of the investor’s responsibilities is to obtain the right insurance policy, such as public liability insurance policy, health insurance policy for employees, and employees' (workmen) compensation insurance policy. In this article, we would like to outline these three key types of policies, which are mandatory for most entrepreneurs in the UAE.

Public Liability insurance

Public Liability Insurance policy is one of the most common types of commercial insurance policies, and normally, a prevalent part of the owners are obliged to obtain it. The main purpose of this type of policy is to protect the company, in case a third party will be liable for damages against the owner’s office or other premises. The reason why this insurance policy is mandatory can be simply justified - in case of bodily injuries, caused to an individual or individuals at the business premise, the claims might be settled via the Public Liability Insurance policy. The range of covered amounts in AED for this type of insurance varies from 500,000 AED to 100 million AED. 

Public Liability Insurance policy is required for almost every business model assuming personal interactions with clients: constant attendance of clients at the premise, regular visiting of clients to the premise, leasing and ownership of the premise, and public operations on a regular basis. Meanwhile, the activities, which are obliged to obtain Public Liability Insurance include manufacturers, retailers, event organizers, contractors, and services. 

Apart from the bodily injuries, if there are any damages to the business property, caused by the supplier, client, or any other participant in the process, insurance claims will be covered, inclusive of the court fees. 

Public Liability insurance policy secures the company, providing indemnity to third parties. There are two types of Public Liability Insurance in the UAE:

• Business activities coverage, including working at different sites. This coverage oversees the liability claims, that arose from the daily operations, related to damages to public property, or any other damage at the client’s premise
• Premises coverage. This type of insurance covers the third parties' claims, occurring at the business premises. For example, if the customer slides on a wet surface at the company’s office, resulting in breaking his limbs. Another example is a fire at the office, causing damage to the adjacent buildings. 

Claims, which are usually not covered by a Public Liability insurance policy

Sometimes there are cases, which are not covered by the Public Liability insurance policy. These occasions may include: damages that occurred from radiation, nuclear pollution, and other chemicals; personal property claims; claims, that occurred as a result of war, external invasion, and similar situations; death or injuries of employees, claims, that arose as a result of negligence; claims on products, damages, occurred from rental of cars, watercraft, or aircraft. 

Health insurance

This type of insurance is mandatory for all residence holders in Dubai and Abu Dhabi. In some cases, the insurance coverage might extend to the families of a particular employee, depending on HR policies. Healthcare in the UAE is regulated by four authorities: Health Authority Abu Dhabi (HAAD), when it comes to Abu Dhabi; The Dubai Health Authority (DHA), when it comes to Dubai, The Ministry of Health and Prevention (MOHAP), and Insurance Authority (IA). 

According to DHA, the minimum level of coverage must comply with these criteria: coverage of previously existing and chronic conditions, in some cases waiting period applies; maternity cover, with 20% excess; outpatient coverage with 20% excess; Inpatient treatment with 20% excess; diabetes screening, as stipulated by DHA as preventative care; medications with maximum limit 1,500 AED per visit; crucial vaccinations for newborns and children.

Workmen compensation insurance policy

This type of insurance policy is also called Workmen Compensation Insurance, and is regulated by the UAE’s Labor Law, the Federal Law № 8 of 1980, which has the amendment, a Federal Decree Law № 33 from 2021, stipulating provision for all national and international workers except security officers, army, police, local government and federal employees and officers, and employees working under DIFC and ADGM jurisdictions.  

The key reason behind obtaining this insurance policy is in creating a safe environment for employees, minimizing the possible risks as much as possible. The company will be liable to pay the compensation for an employee in case of injuries and death during the course of his/her employment. 

The key reason behind obtaining this insurance policy is in creating a safe environment for employees, minimizing the possible risks as much as possible. The company will be liable to pay the compensation for an employee in case of injuries and death during the course of his/her employment. 

Thus, according to the Workmen Compensation Insurance, an employer is obliged to cover the following occurrences: permanent total disability due to the injury, which happened at the workplace; permanent partial disability, received at the workplace; temporary total or partial disability, when the employee is eligible for compensation for the lost salary, due to the injury, received at the workplace, the compensation comprise full wages for the first 6 months, and half-wages every consequent month, till full recovery; occupational demise - if an employee passed away at the workplace; repatriation expenses; the demise of an employee, occurred from the employer’s negligence; injuries of employees, occurred due to the transportation to or from the workplace; injuries or demise, happened due to sunstroke or hernia. 

Meanwhile, the following occurrences are not considered a liability if the employer, and therefore, are not subjected to compensation: suicidal death; natural death; injuries, caused as a result of suicidal attempt; death from AIDS; injuries and death due to addictive substances or alcohol; death or injuries from nuclear radiation, toxic substances; death or injuries, occurred outside the workplace, even are related to work. 

If you would like advice or assistance concerning selecting the commercial or private insurance package in the UAE, kindly contact us. 

Marsel Shadmanov

Head of Corporate Services at Garant Business Consultancy DMCC

Phone +971 4 421 4335

Email info@garant.ae