Mandatory third party insurance for Saudi factories

Sixty percent of Saudi Arabia's factories with hazardous materials operate in suburban areas, compared to 40 percent in designated industrial zones
Image for illustrative purposes only
By Courtney Trenwith
Tue 21 Jan 2014 11:22 AM

The Saudi government has made third party insurance mandatory for all factories handling hazardous materials in suburban areas following complaints from residents.

About 60 percent of the kingdom's factories are located in suburban areas, while only 40 percent are in one of the 14 designated industrial zones, according to the Saudi Industrial Property Authority.

Of the 1052 factories in Jeddah, 572 are in residential areas, according to figures released earlier by the Jeddah Chamber of Commerce and Industry’s (JCCI) industrial committee.

The Council of Ministers made the decision to enforce mandatory third party insurance during a meeting on Monday amid growing demand in several cities to remove factories and workshops from residential areas because they posed a hazard to human health and the environment, the Saudi Gazette reported.

A report prepared by an expert committee on the issue also was considered, Minister of Culture and Information Abdul Aziz Khoja said in a statement to the Saudi Press Agency.

The Civil Defense Council has been asked to identify the suburban factories and it will be responsible for ensuring they are insured when they renew the factory licenses.

The terms and conditions of tenders to operate government factories in densely populated areas also will include a mandatory provision for third party insurance.

Subscribe to our Newsletter

Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.