You have a fire in your warehouse. You have a “Property All-Risk” policy. You report it.
You expect money in 14 days to rebuild.
The reality? 3 to 6 months.
Why? Is the insurer holding the cash to earn interest?
Usually, no. The delay comes from the complexity of proving business losses in a region where bookkeeping
can sometimes be… informal.
Before an insurer pays AED 1 Million, they send in the “Forensic Accountants.” Here is what they are looking
for, and why it stalls your payout.
1. The “Stock Record” Mismatch
The Claim: “We lost AED 500,000 worth of leather shoes in the fire.”
The Adjuster Asks: “Show me the inventory logs from the day before the fire.”
The Problem
Many SMEs manage stock using mental math or loose Excel sheets.
If your physical stock count (what burned) doesn’t match your audited books (what you told the taxman),
everything stops.
The Delay: The accountant has to reconstruct your inventory history from Purchase Orders
(POs) and Sales Invoices going back 12 months. This takes weeks.
2. The VAT Invoice Requirement
Since 2018, everything in UAE must be VAT compliant.
To pay a claim, insurers need Valid Tax Invoices for the Items Lost.
If you bought your office furniture 5 years ago from a guy in Dragon Mart who gave you a handwritten
receipt… You have a problem.
The insurer cannot verify the value. They will offer you a “Market Value” settlement (usually 20-30% of what
you paid), or ask you to find bank statements proving the transfer. Digging up 5-year-old bank transfers
causes massive delays.
3. The “Business Interruption” Calculation
This is the hardest claim to settle.
You have “Loss of Profit” cover. You say: “The fire stopped us working for 3 months. We lost AED 300,000
in profit.”
The Insurer says: “Prove it.”
They look at your “Trend.”
- Last year, you made AED 100k/month.
- But the market is down this year by 20%.
- They adjust your claim DOWN to AED 80k/month.
You argue: “No! We were about to sign a big contract!”
This negotiation—predicting the future based on the past—is where lawyers get involved and time drags on.
4. The “Proximate Cause” Debate
Insurance covers specific triggers. The investigator must prove exactly what started the chain of events.
Scenario: Water damage in a shop basement.
- Possibility A: Pipe burst inside the building. (Covered).
- Possibility B: Heavy rain flooded the street and water seeped in under the door.
(Flood). - Possibility C: Sewage backup from the municipality line. (Often Excluded).
If the cause is unclear, they send engineers. They test the water. They dig up pipes. Until the “Proximate
Cause” is agreed (and matched to the policy), the checkbook stays closed.
Comparison: Prepare to be PAID
| The Unprepared Business | The “Claim-Ready” Business |
|---|---|
| Keeps paper receipts in a box (which burned). | Scans all invoices to Cloud Storage weekly. |
| Asset Register is “in my head.” | Asset Register is an Excel sheet updated quarterly. |
| Result: 6 Month Settlement. 60% Payout. | Result: 4 Week Settlement. 95% Payout. |
Tip: The speed of the claim corresponds exactly to the speed of your document retrieval.
FAQ: What to Do
Q: Can I hire someone to help me?
A: Yes. You can hire a “Loss Assessor.” This is an expert who works for YOU, not the
insurance company. They prepare your claim, negotiate the math, and fight for the maximum payout. They take
a % of the claim (usually 5-10%), but they often speed up the process by months.
Q: Who pays for the forensic accountant?
A: The Insurance Company pays their own accountant. But you must spend your own staff time answering his
1,000 questions.
its value). If not, make one today. Without it, you are proving a negative.