Curious about the value of business insurance? Find out if it is advisable to buy one in the blog below!
If you are starting a business in the UAE and want to know what your business insurance options are, and whether it’s advisable to spend a lot of money on various insurances or just rely on any legally mandatory insurances alone, then you’ve come to the right place! This blog will try and help you prioritise and understand your business insurance needs!
Defining Business Insurance
Business, or commercial, insurance refers to the different classes of insurance a business can obtain to cover its liabilities to other parties or to protect its assets against unexpected damages or losses.
Needless to say, the different types and nature of the activities of each organisation will expose it to different risks and hence every organisation’s insurance needs will vary according to its business description and the activities it undertakes.
Types of Business Insurance
Although we mentioned before that the Business Insurance a company opts to obtain may vary depending on its activities, there are still a few common types of insurance that most companies purchase. These usually comprise of basic cover towards protecting the company’s liabilities towards the public and are typically a legal requirement for any business to operate in most countries.
Usually, the most popular types of business insurance in the UAE include:
1. Public Liability Insurance
This type of insurance is compulsory for many business sectors in the UAE; especially ones that are related to public works that might be hazardous to the public, such as construction operations. This policy provides cover for legal liability to Third Parties for any injury or damage sustained as a result of the Insured Company’s negligence whilst carrying out their business.
2. Group Health Insurance
One of the most popular types of Business Insurance, and mandated by law in Dubai and Abu Dhabi. All companies operating in these emirates must have a group health insurance that includes and covers all employees of the organisation for their Medical expenses The mandatory requirement is for a basic Health Insurance known as EBP or Essential Benefits Plan which comprises of various coverages with limits as prescribed by each emirate’s Health Authority. Companies may choose to offer a tiered system linked to the seniority of their employees and thus it is seen as a valuable employee benefit.
3. Workmen Compensation and Employer’s Liability
This might be compulsory for specific types of business in some emirates: Dubai’s Federal Law, for example, mandates companies to purchase such insurance to cover their liability towards any damage or injuries sustained by/to their employees as a result of a work-related incident and to provide them with compensation and/or salary payment accordingly.
4. Professional Indemnity Insurance
This cover is invaluable for any business that is in the “advice-giving” sector. It provides cover for any claims made by clients of a company who allege that poor advice or negligence management by the insured company has caused them to suffer a financial loss. Typically claims can be made for losses arising as a result of errors or omissions, bad advice, unintentional breach of contract and more.
Our Verdict: Is It Advisable to Purchase Business Insurance?
Since each business and situation is unique, it’s perhaps inappropriate to give advice or a “black and white” answer. However, we can comment with some confidence that it’s always “better to be safe than sorry” and talk to an insurance advisor to help evaluate your insurance needs.
Get in touch with our Insurance Advisors at InsuranceMarket.ae and see for yourself how we go above and beyond to help sort out your insurance needs!