Contractors all risks insurance in the UAE

Do you need a policy to get a Dubai construction permit?

That is Art 4(a) of Executive Council Resolution 28 of 2022. The rule attaches to the contractor and the permit, not to construction businesses in general.¹

• Where it applies. Across Dubai, including special development zones and free zones such as DIFC (Art 2).
• Which works. Building construction, alteration or addition works of 300 square metres or more, demolition, shoring, and other works set by Dubai Municipality (Art 4(b)).
• How long the policy lasts. For building, alteration or addition works, from the permit until one year after the Certificate of Completion. For demolition and shoring, until the Certificate of Completion (Art 5(a)).
• What it covers. Risks, losses and material damage related to the works, and civil liability to third parties (Art 6).
• Changes. No cancellation or change without approval, and a permit may be rejected if the policy falls short (Art 8 and 9).
• Deposits. The policy replaces security deposits and financial guarantees for the permit (Art 10(a)).

The Resolution never uses the words contractors all risks. It describes the policy by what it covers. Dubai Municipality prepares a standard policy template under Art 7. Ask Dubai Municipality for it before you apply.

Who must hold contractors all risks cover?

Check the licence conditions of your zone before you apply for a building permit.

What does a RAKEZ licensee have to insure?

Before Building Works, a RAKEZ licensee insures the works for not less than full reinstatement cost and plant, materials and equipment at full replacement value, plus an additional 10% of the insured amount, until the Operation Fitness Certificate is issued. Public and third party liability and workers’ compensation cover apply to occurrences in the 3 years from that certificate, at limits the Authority prescribes. The rules do not state those limits. The Authority may suspend a Building Permit if the cover is missing before the Completion Certificate.²

What does the cover include?

One law firm guide describes the cover, not a policy wording.³

• Cover is for physical damage to the works, including materials on site and in transit, generally at full reinstatement value with an allowance for professional fees.
• Defects themselves are typically excluded. The policy responds to resulting damage unless extended cover is bought.
• Some UAE insurers exclude hot works unless declared.
• Where a contractor uses a global policy, claims on other projects can erode an aggregate limit.

Ask your insurer whether the policy is a project policy or a global policy, whether any aggregate limit is shared with other projects, and whether hot works, contractor plant and equipment or design responsibility are covered.

Do your lease or contract ask for it?

They can. Fenwick Elliott writes that some covers may be mandatory for engineering classifications or are commonly required under UAE construction contracts. This is law firm commentary dated 18 June 2024, and how often it applies is not measured.⁴

• DAFZ. The Standard Leasing Terms 2025 (cl 5.6.1(iii)) require contractors all risks cover in joint names, with worker’s compensation, where the tenant or its contractors work on the premises.⁵
• Dubai Healthcare City. The lease terms (cl 3.20.4) require contractor’s all risk and worker’s compensation cover when the tenant or its contractors work on the premises.⁶

Check whether your lease or contract requires joint names, a cross liability clause or a waiver of subrogation.

How long is a contractor liable after the policy ends?

That covers total or partial collapse and defects threatening structural integrity and safety, unless the parties intended a life shorter than 10 years (Civil Transactions Law, Art 821(1) and (2)). The period starts when the employer takes delivery. Clauses exempting or limiting engineer or contractor liability are void. A warranty claim is not admissible 3 years after the collapse or discovery of the defect.⁷

Resolution 28 keeps its policy valid for a year after the Certificate of Completion. The text does not say whether that year equals a policy maintenance period. Ask Dubai Municipality. Under FIDIC forms, one law firm guide says contractors all risks obligations generally cease on taking over, and the employer then insures the completed works.³

What do the Central Bank figures show?

The Central Bank groups engineering, construction and energy together, and the 2025 report does not show contractors all risks separately. The line wrote AED 4,284.1 million of premium in 2025, up from AED 4,102.5 million in 2024, on 80,446 policies. Paid claims were AED 1,590.7 million, a paid loss ratio of 39.8%, and insurers kept 15.7% of the premium after reinsurance.⁸ Of the premium written within the UAE, 53.9% is allocated to Abu Dhabi, 41.9% to Dubai, 2.9% to Sharjah and 1.2% to the other emirates.⁸