You have Health Insurance for your staff. You think: “If they get sick or injured, they are
covered.”
Wrong. Health Insurance covers illness and standard accidents.
It does NOT cover work-related injuries, disability compensation, or legal liability if an
employee sues you for “Unsafe Working Conditions.”
This gap is called Workmen’s Compensation. And ignoring it can cost your company millions in
Labor Court settlements.
1. The Legal Requirement (UAE Labor Law)
Under Federal Law No. 8 (The UAE Labour Law), employers are strictly liable for injuries sustained by
employees “during the course of employment.”
What you must pay (by Law):
- Medical Expenses: 100% of treatment costs.
- Lost Wages: Full salary for first 6 months of recovery, then 50% for next 6 months.
- Disability: A lump sum if they lose a finger/limb (e.g., AED 50,000+).
- Death: A mandatory “Diya” (Blood Money) or Death Benefit (Min AED 200,000 for work
accidents).
If you don’t have insurance, YOU pay this from the company account.
Can your cash flow handle a sudden AED 200,000 payout tomorrow?
2. Health Insurance vs. Workmen’s Comp
This is the confusion.
“But my Medical Insurance cards are valid!”
The Gap: Most standard DHA/HAAD Medical Insurance policies have an exclusion for “Work
Related Injuries” or “Occupational Diseases.”
- Employee gets flu: Medical Insurance pays.
- Employee falls off a ladder at work: Medical Insurance might Reject. They say:
“This is an occupational accident. Use your Workmen’s Comp policy.”
If you don’t have Workmen’s Comp, you are stuck paying the hospital bill cash.
3. Employer’s Liability (The Lawsuit Shield)
Workmen’s Comp pays the fixed statutory amounts (the “Table of Benefits”).
But what if the employee is angry?
Scenario:
Your driver crashes the company van because the brakes were faulty. He is paralyzed.
Workmen’s Comp pays the statutory AED 200,000.
But the driver sues you for Negligence. He demands AED 2 Million for “Loss of Future
Earnings” and “Pain and Suffering.”
Workmen’s Comp Policy alone won’t cover this lawsuit.
You need “Employer’s Liability” (EL) extension. This pays for the lawyers and the High
Court settlement if you are found negligent.
4. The “Coming and Going” Rule
Is the employee covered on their way to work?
The Law: Generally, the commute from Home to Work is considered “in the course of
employment” if using company transport. If using their own car, it’s a grey area.
However, a good Workmen’s Comp policy explicitly covers “Travel to and from work.” This
protects you if your sales guy crashes his car on the way to a client meeting.
Comparison: The Cost of Peace
| Company Size | Workmen’s Comp Premium (Approx) | Risk Exposure (Uninsured) |
|---|---|---|
| Small Office (5 Staff) | AED 1,500 / year | AED 1,000,000+ |
| Contractor (20 Laborers) | AED 5,000 / year | AED 5,000,000+ |
For AED 1,500, you remove the risk of bankruptcy. It is arguably the best value insurance in the market.
FAQ: Essential Checks
Q: Is this mandatory for my License renewal?
A: For many Free Zones (DMCC, JAFZA) and Mainland Contractor licenses -> YES. You cannot
renew your Trade License without showing this certificate.
Q: Does it cover me (The Owner/Partner)?
A: Usually No. It covers “Employees” on the visa. Partners/Investors are not “Employees”
under Labor Law. You need Personal Accident insurance for yourself.
and you have employees, you are violating Labor Law financial security requirements. Call a broker.