Business owners often buy a package called “Property All Risk” (PAR) and assume it covers literally “All
Risks.”
Then a pandemic happens. Or a sandstorm. Or a supplier goes bankrupt.
And the insurer says: “Excluded.”
To audit your own business survival plan, you need to understand the stark difference between “Standard
Cover” and “Critical Extensions.”
1. The Big One: “Force Majeure” is Not a Thing (Actually)
People say “Act of God” is not covered. That is false.
- Covered: Lightning, Earthquake, Storm, Flood. These are “Acts of God” but they are
STANDARD perils in almost all UAE policies. - Not Covered: War, Terrorism, Nuclear Radiation.
The Grey Area: “Pandemic / Communicable Disease.” Since 2020, almost every new policy has a
specific “Communicable Disease Exclusion.” If your shop closes because of a Lockdown, Business Interruption
insurance pays ZERO.
2. Theft vs. “Mysterious Disappearance”
This catches retailers out constantly.
Scenario A: Break-In
A thief smashes the door at 3 AM and steals laptops.
Verdict: COVERED. (Forcible and Violent Entry).
Scenario B: Inventory Shortage
You do a stock take. You are missing 10 laptops. No broken doors. No CCTV of theft.
Verdict: EXCLUDED. This is “Unexplained Loss” or “Inventory Shortage.” Insurers do not
pay for your bad bookkeeping or staff pilfering (unless you have specific “Fidelity Guarantee”
insurance).
3. “Machinery Breakdown” vs. “Fire”
Your “Property All Risk” covers your big printing press if it burns in a fire.
However: If the machine just stops working because a gear snapped inside (internal
mechanical failure), Property Insurance pays nothing.
You need a separate policy called “Machinery Breakdown.” It acts like an extended warranty,
paying for repair costs and engineers even if there was no fire.
4. Third Party Liability: The “Custody” Trap
You run a laundry service. You have Public Liability insurance.
You accidentally burn a customer’s AED 10,000 silk dress.
Claim Denied. Why?
Standard Public Liability covers damage to Third Party property “NOT in your Custody or
Control.”
Because the dress was in your care (you were washing it), it is excluded under PL.
The Fix: You need an extension called “Goods in Care, Custody and Control.”
Without it, you are liable for everything inside your shop belonging to customers.
Comparison: The Menu of Covers
| Risk Event | Standard “Office” Policy | Extended “Smart” Policy |
|---|---|---|
| Fire / Flood | ✅ Covered | ✅ Covered |
| Staff Theft (Cash) | ❌ Excluded | ✅ Covered (Fidelity Guarantee) |
| Cyber Hack | ❌ Excluded | ✅ Covered (Cyber Extension) |
| Fridge Breakdown (Spoiled Food) | ❌ Excluded | ✅ Covered (Deterioration of Stock) |
FAQ: The Final Summary
Q: Does Business Interruption pay if my supplier burns down?
A: Only if you have “Suppliers Extension.” If your main factory in China burns down and you
have nothing to sell, standard BI pays nothing. The Extension covers your loss of profit due to
their fire.
Q: Is Glass covered?
A: Usually yes, “Plate Glass” is standard. But if you have expensive “Neon Signs” outside, check if they are
listed separately.
wear and tear, slow leaks). If it happened fast, claim it. If it happened over 6 months, fix it yourself.