Types of Liability Insurance in UAE

With this insurance type, you get coverage for legal costs and compensation related to injuries, property damage, or other third-party claims caused by business operations. However, it doesn’t apply to intentional damage or harm caused to the insured or their property.

Why is Liability Insurance Important in the UAE?

In the UAE, different types of liability insurance are essential for many sectors. They help businesses —

• Meet legal and regulatory requirements
• Protect against third-party injury or property damage claims
• Safeguard assets and financial stability
• Build trust with clients and stakeholders

10 Different Types of Liability Insurance in the UAE

Here are the main types of liability insurance for businesses and professionals in the UAE —

1.) Comprehensive General Liability Insurance (CGL)

CGL insurance financially protects businesses from legal claims arising out of bodily injury, property damage, or death to third parties caused by business operations. This is among the most common types of business liability insurance, especially for companies interacting with the public.

It may also include:

• Product liability
• Pollution liability
• Advertising liability

2.) Professional Indemnity Insurance (PI)

PI insurance covers professionals like doctors, architects, consultants, and IT specialists against claims of negligence, errors, or omissions in service. It is a vital type of liability insurance for businesses offering expert advice or professional services.

Covered professions include:

• Engineers
• Accountants
• Lawyers
• Marketing consultants

3.) Employer’s Liability Insurance

This is a mandatory type of liability insurance in the UAE covering claims from employees who suffer injuries or illness at work. Employers liability insurance ensures legal compliance with Chapter 8 of UAE Federal Law No. 8 of 1980.

Also known as:

• Workmen's Compensation Insurance
• Employee Compensation Insurance

It includes medical bills, death compensation, and disability payouts.

4.) Public Liability Insurance

Public liability insurance covers legal claims from third parties (not employees) for injury or property damage on your premises. In the UAE, this is one of the essential types of business liability insurance for companies that interact with the general public. It’s crucial for:

• Retail stores
• Clinics
• Restaurants
• Event venues

5.) Product Liability Insurance

Manufacturers, distributors, and retailers can face claims if a product causes injury or damage. Product liability insurance, one of the best types of liability insurance, protects against such lawsuits. It is especially useful for businesses in the domain of —

• Food & Beverage
• Pharma
• Electronics
• FMCG

6.) Cyber Liability Insurance

With increasing reliance on digital systems, cyber liability insurance protects businesses from financial losses due to cyber incidents like hacking, ransomware, phishing, or data breaches. 

Who needs it?

• E-commerce platforms storing customer payment info
• Banks and fintech companies handling sensitive financial data
• Hospitals and clinics managing electronic medical records

In the UAE, where data privacy regulations are tightening, this type of liability insurance is fast becoming essential for businesses of all sizes.

7.) Event Liability Insurance

This type of liability insurance covers risks associated with organising public or private events. It financially protects against injury to attendees, damage to rented venues or equipment, and event cancellation costs due to weather or unforeseen events. 

Event liability policies are ideal for —

• Trade shows and exhibitions 
• Corporate gatherings and seminars
• Weddings, concerts, or sporting events

While not mandatory, venues in the UAE often require proof of event liability coverage before renting out event spaces.

8.) Directors & Officers (D&O) Insurance

D&O insurance covers senior executives and board members against personal liability from decisions made in their corporate roles. It typically covers:

• Legal defence fees
• Settlements and damages
• Costs related to regulatory investigations

Why does it matter: Executives in UAE companies, including free zone firms and international subsidiaries, may be held personally liable for breaches of duty, mismanagement, or regulatory non-compliance. With such insurance, however, your business can be financially shielded.

9.) Management Liability Insurance

This type of liability insurance goes beyond D&O and financially protects the broader leadership team and the company itself. It includes —

• Employment Practices Liability (e.g. wrongful termination, discrimination claims)
• Fiduciary Liability for mismanaging employee benefits
• Entity Coverage to protect the business from internal misconduct lawsuits

It’s especially relevant for SMEs and large corporations in regulated sectors like finance, logistics, and healthcare operating in the UAE.

10.) Umbrella Liability Insurance

Think of umbrella insurance as extra protection when the limits of your existing policies (like general liability) are exhausted. It:

• Extends coverage limits
• Covers some claims excluded by other policies
• Adds financial security in large lawsuits

For instance, if your general liability policy covers up to AED 1 million and you’re sued for AED 1.5 million, umbrella insurance can cover the remaining AED 500,000.

Who needs it?

• Large businesses with multiple risk exposures
• Property owners, hotels, malls
• Transport and construction companies

How to Choose the Right Type of Business Liability Insurance Policy?

Here’s how businesses in the UAE can select the most suitable types of liability insurance —

• Assess Your Risks

Start by understanding your business operations and identifying key risks: workplace injuries, product recalls, professional errors, cyberattacks, and so on.

• Know Legal Requirements

Some insurances, like Workmen's Compensation and Third-Party Motor Liability, are mandatory in the UAE.

• Compare Providers and Policies

For this, consider factors like —

1. Coverage limits
2. Exclusions
3. Legal defence cost inclusion
4. Claims process and reputation of the insurer
    

• Customisation and Add-Ons

Choose a policy that can be tailored to your specific business size, sector, and risk profile. Add-ons like cyber protection or business interruption coverage can be valuable.

• Consult a Licensed Broker

A licensed advisor familiar with UAE regulations can help you navigate options, avoid gaps in coverage, and get the best rates.

Final Thoughts

Understanding the different types of liability insurance is key to safeguarding your business in the UAE. From public liability to professional indemnity and cyber protection, each policy plays a vital role. Don’t wait for a legal claim to disrupt your operations — review your insurance needs today and ensure you’re covered through the right channels.

Frequently Asked Questions