Directors and officers insurance in the UAE
VARA licensed firms must hold directors' and officers' insurance under the VARA Company Rulebook. No duty for other companies has been identified. Federal company and bankruptcy law set the personal liability of managers and directors.
When are directors and managers personally liable?
Federal law makes LLC managers, directors and executive management liable to the company, shareholders and third parties in the cases below.
| Who | What the text says | Where |
|---|---|---|
| LLC manager | Liable to the company, partners and third parties for fraud, and for losses from improper exercise of powers, breach of law, the MOA or the appointment contract, or gross error. Contrary provisions are void | Companies Law, Art 84(1) |
| The company | Bound by board acts and liable for damage from unlawful acts of the chairman and directors | Companies Law, Art 161 |
| Directors and executive management | Liable to the company, shareholders and third parties for fraud, abuse of power and breach of the law or articles. Every contrary condition is void | Companies Law, Art 162(1) |
| All directors | Liability reaches all directors if the resolution was unanimous. Those who oppose a majority resolution in writing in the minutes are not liable. Absent members have conditions | Companies Law, Art 162(2) |
| Board and executive management | The company may sue the board by general assembly resolution. Any shareholder may sue the company, board and executive management for damage from a breach | Companies Law, Art 165, Art 166 |
| Board | Liable to partners, shareholders and creditors for fictitious profit distributions | Companies Law, Art 30(1) |
| Directors, managers and persons in actual management | In bankruptcy the court may oblige them to pay an amount proportional to their mistake, used to repay company debts, in listed cases, including where assets cover under 20% of debts and mismanagement is proven | Bankruptcy Law, Art 246(1) |
In bankruptcy, Art 246(2) gives a defence that all reasonable precautions were taken, Art 246(3) requires the claim within 2 years of the judgment, and Art 246(4) exempts persons with recorded written reservations.1
Companies Law Art 162(1) voids every contrary condition, and Civil Transactions Law Art 257 voids exemption clauses for harmful acts.23
Ask your insurer whether cover responds to a fraud finding.
Who must hold D&O insurance?
| Who | Amount | Instrument | Article |
|---|---|---|---|
| VARA licensed virtual asset service providers | Not stated. Adequate to the size and complexity of the business | VARA Company Rulebook | Rule VI.D.1 |
Rule VI.D.1 has the firm hold insurance with a regulated insurer. Cover may sit in another group entity’s name if the policy states the firm as an insured party and its level of cover. VARA may apply discretion at licensing and require other protection as a licence condition.4
Outside VARA, no such duty has been identified. The Companies Law uses the word insurance only for regulated activities and regulators. The SCA Governance Guide of 2020 has no insurance term, but it has later amendments, including one from 2025.5 Check those.
Do free-zone company rules mention insurance for directors?
Three do. None requires it.
| Zone | What the text does | Article | Effect |
|---|---|---|---|
| RAK ICC | A company may buy and maintain insurance for a director against liability asserted and incurred in that capacity, whether or not the company could indemnify the person | Regulation 138 | Permits it. No duty |
| DIEZA zones | Financial assistance to a director does not include liability indemnity insurance related to the discharge of duties | Para 44.3(b) | Carve-out. No duty |
| Meydan | A director or general manager need not declare an interest in a contract insuring them against liabilities in that role, if the company or a related entity is not the insurer | Clause 38.1 | Exception to a declaration duty. No duty to insure |
No matching text has been identified for a federal LLC or joint stock company. Check your articles of association and your free zone’s company regulations.
Does the Central Bank publish figures for D&O insurance?
The Central Bank report does not show D&O separately.6
The small print
- Which text. The Companies Law rows come from the 2021 text on the federal portal.2 The portal lists one amendment, dated 2025, and its page last updated 1 October 2025 has the same wording for these articles.7
- Civil Transactions Law. The general harm rule and the voidness of exemption clauses for harmful acts are in Art 246 and Art 257.3
- Free-zone texts. RAK ICC Business Companies Regulations 2018, Regulation 138.8 DIEZA Implementing Regulations 2023, para 44.3(b).9 Meydan Companies and Licensing Regulations 2022, clause 38.1.10
- A general D&O duty. Not established. Decree-Law 32 of 2021 and the SCA Governance Guide of 2020 have no such term.25
- Placement rule. Art 82 of Decree-Law 6 of 2025 is a placement rule, not a duty to buy. Art 82(4) gives exceptions, including cover not available in the State.11
Before you speak to a broker
Directors and officers insurance in the UAE
When the question comes up
What a broker may ask you
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The rules in full
Definition Insurance for a director or manager against liability incurred in that capacity, as free-zone company rules describe it.
Key facts
- Who must hold D&O cover by rule4Company Rulebook, Rule VI.D.1. VARA may apply discretion at licensing.
- VARA licensed firms
- Time limit for a claim against directors in bankruptcy1From the bankruptcy judgment. Art 246(3), Decree-Law 51 of 2023.
- 2 years
- RAK ICC rule on director insurance8A company may buy and maintain it. Regulation 138. No duty.
- Permitted
What the evidence supports
- VARA licensed virtual asset service providers hold directors' and officers' insurance4Company Rulebook, Rule VI.D.1. Rule VI.D.4 lets VARA use discretion at licensing.Last checked 4 Nov 2026
Nothing recorded here yet. That does not settle the question.
- RAK ICC: a company may buy and maintain insurance for a director8Regulation 138. Permissive. Applies whether or not the company could indemnify the person.Last checked 4 Nov 2026
- Placement with licensed insurers11Art 82 of Decree-Law 6 of 2025 is a placement rule, not a duty to buy. Art 82(4) gives exceptions, including cover not available in the State.Last checked 4 Nov 2026
- A general D&O insurance duty2Not established. Decree-Law 32 of 2021 and the SCA Governance Guide of 2020 have no such term.Last checked 4 Nov 2026
- Whether a federal company can fund D&O premiums or indemnify directors2Not established. Art 162(1) and Civil Transactions Law Art 257 void certain conditions. Neither addresses insurance or indemnity.Last checked 4 Nov 2026
Sources
11
1UAE Federal Government, Federal Decree-Law No. 51 of 2023, bankruptcy law. Art 246. Last checked 4 Nov 2026. Source document: Federal Decree-Law No. 51 of 2023, bankruptcy law
2UAE Federal Government, Federal Decree-Law No. 32 of 2021 on Commercial Companies. Art 30, Art 84, Art 161, Art 162, Art 165, Art 166. Last checked 4 Nov 2026. Source document: Federal Decree-Law No. 32 of 2021 on Commercial Companies
3UAE Federal Government, Federal Decree-Law No. 25 of 2025, Civil Transactions Law. Art 246, Art 257. Effective 1 Jun 2026. Last checked 4 Nov 2026. Source document: Federal Decree-Law No. 25 of 2025, Civil Transactions Law
4Virtual Assets Regulatory Authority, VARA Company Rulebook. Rule VI.D. Last checked 4 Nov 2026. Source document: VARA Company Rulebook
5Securities and Commodities Authority, hosted by ECGI, Decision No. 3/Chairman of 2020 Concerning Approval of Joint Stock Companies Governance Guide. Last checked 4 Nov 2026. Source document: Decision No. 3/Chairman of 2020 Concerning Approval of Joint Stock Companies Governance Guide
6Central Bank of the UAE, Annual Statistical Report for the Insurance Sector of the UAE 2025. Last checked 4 Nov 2026. Source document: Annual Statistical Report for the Insurance Sector of the UAE 2025
7UAE Federal Government, Federal legislation portal record for Decree-Law 32 of 2021. Last checked 4 Nov 2026. Source document: Federal legislation portal record for Decree-Law 32 of 2021
8RAK ICC, RAK ICC Business Companies Regulations 2018. Regulation 138. Last checked 4 Nov 2026. Source document: RAK ICC Business Companies Regulations 2018
9Dubai Integrated Economic Zones Authority, DIEZA Implementing Regulations 2023. Para 44.3(b). Last checked 4 Nov 2026. Source document: DIEZA Implementing Regulations 2023
10Meydan Free Zone, Companies and Licensing Regulations 2022. Clause 38.1. Last checked 4 Nov 2026. Source document: Companies and Licensing Regulations 2022
11CBUAE Rulebook, Federal Decree-Law No. 6 of 2025 Regarding the Central Bank, Regulation of Financial Institutions and Activities and Insurance Business. Art 82. Effective 16 Sept 2025. Last checked 4 Nov 2026. Source document: Federal Decree-Law No. 6 of 2025 Regarding the Central Bank, Regulation of Financial Institutions and Activities and Insurance Business
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- Next review due
- 10 Feb 2027
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- Published