Starting a business in UAE is easy but maintaining continuity and profitability can be daunting. Here's the responsibility of a new business owner. Read on to know more.

UAE – The Hub for Entrepreneurship

The UAE ranks 4^th in the Global Entrepreneurship Index in the world. The 350,000 SMEs in the UAE represent 94% of the total number of firms, provide jobs for 86% of the private sector workforce and contribute over 50% to the national GDP. The thriving entrepreneurial spirit of the country can be attributed to a number of factors such as political and social stability, the state-of-the-art infrastructure, a favorable taxation environment, the ease of doing business, and the availability of skilled talent.

According to the National Entrepreneurship Agenda set by the Government of UAE, by the year 2031, UAE will hone 10 unicorn startups and will be one of the top 3 countries in the global entrepreneurship index. Besides the National agenda, the government of the UAE empowers entrepreneurs by offering golden visas, permitting 100% foreign ownership of companies, initiating 10+ key government programmes and 11+ accelerators for entrepreneurship and start-ups, and developing free zones and integrated business communities

The Importance of Business Insurance in the UAE

Business owners are required to undertake various steps to safeguard their business physically, financially, and legally to ensure business profitability. These steps range from preventive measures like installing safety systems, employee training, backup funds, etc. Acquiring relevant business insurance plays a crucial role in safeguarding your business from legal and financial repercussions of a mishap, error, negligence, slander, and so on.

The insurance requirements of a business are contingent upon a number of factors such as nature, size, and type of business. Certain types of business insurances are also mandatory. For instance, Contractors All Risk (CAR) Insurance has become a mandatory insurance requirement in Dubai to safeguard the booming construction sector of Dubai. Businesses in UAE are also mandated to provide Group Health Insurance or Group Medical Insurance to safeguard the health of their employees. Failing to acquire mandatory insurance for your business can lead to serious consequences ranging from hefty fines to even business termination.

As a business owner vested in the safety and profitability of their business, you might want to look beyond the mandatory insurance requirements. Recognizing the vulnerabilities of your business, assessing the extent of risk, analyzing options and acquiring customized business insurance solutions to safeguard your business can be done with the assistance of a business insurance broker in UAE. Read on to understand the most common types of business or corporate insurance in UAE.  

The different kinds of business insurance available.

1. Professional Indemnity Insurance

Professional Indemnity insurance, often referred to as errors and omissions (E&O) insurance, protects a company from claims of misconduct arising from mistakes or failure to perform. Professional indemnity insurance is not a one-size-fits-all coverage. Each sector has its own unique set of challenges, which can be tackled in a policy designed specifically for a company. Professional indemnity insurance or PI Insurance covers the risks for firms and professionals offering services like architects, consultants, engineers, lawyers etc.

2. Business Interruption Insurance

A business's activities will almost certainly be disrupted if a calamity or catastrophe occurs. Your company will lose money during this period as all the revenue-making functions will be at a pause. This sort of insurance is particularly useful for businesses that need a physical place to operate, such as retail outlets. Business interruption insurance reimburses a company for income lost due to these circumstances.

3. Workmen's Compensation Insurance

Workmen's' compensation insurance should be added to a company's insurance policy structure as soon the first employee is employed. It generally covers medical care, disability compensation, and death benefits for an employee, in case he/she incurs an injury or dies while working for that company. Even if employees appear to be performing low-risk tasks, slip-and-fall accidents or medical issues might result in a costly lawsuit.

4. Product liability Insurance

Product liability insurance is required if your organization produces  items for general sale. Even if an organization takes every precaution to ensure that its goods are safe, they might be a party in a lawsuit as a result of harm caused by any of its commodities. In such circumstances, product liability insurance protects a company, with coverage that may be tailored to specific needs.

5. Trade Credit Insurance

Trade Credit insurance, also called as receivables protection, it is protection against your buyer’s failure or inability to pay its trade debts. This can arise because your buyer is facing financial difficulty and becomes insolvent. By having trade credit insurance, it helps to protect you from the severity caused by a catastrophic loss, balance sheet strength is ensured, cash flows are protected, and loan servicing costs are reduced. A trade credit insurance policy also allows companies to feel secure in extending more credit to your existing buyers, or to pursue new, larger buyers that would have otherwise seemed too risky. It significantly reduces the risk of entering new markets.

6. Fleet Insurance

Fleet insurance insurers your company registered vehicle/s. Company cars should be adequately insured to protect firms from liability in the event of an accident. Organizations need cover against third-party injuries at the absolute least, but comprehensive coverage will also cover the vehicle in the event of an accident caused by the driver. Employees who drive their own automobiles for work will be covered by their own personal insurance in the case of an accident. If an employee is supplying/delivering products and services for a fee,  it is considered an exemption. This includes those who deliver packages.

7. Comprehensive General Liability

A CGL provides more coverage than a Public Liability Policy. The CGL policy covers the insured's liability for death, bodily injury, and/or consequential damages to third parties stemming from the insured's business activities (including litigation costs). Product liability and operation liability coverage can be added to the policy to further enhance coverage

Conclusion

Understanding the insurance needs of your business and finding the correct policy can be an intimidating process. If you’d like complimentary review and consultation session by our business insurance experts, please get in touch