By Shane McGinley
Majority of firms do not consider 'natural calamities' enough of a risk to add it to policies.
UAE businesses could be left with flood damage bills running into millions of dirhams, after a Dubai-based insurance broker confirmed that the majority are not insured against “natural calamities”.
Large swathes of Sharjah, Dubai and Abu Dhabi were left under water this week after heavy rains lashed the Emirates. However, most firms do not consider such threats enough of a risk to justify adding it to their insurance policies.
“Usually companies don’t take this type of cover on their policies,” a commercial broker at Nexus Insurance Brokers told Arabian Business on Wednesday. The broker added that unless companies work in the warehouse or storage sector they do not see it as a viable risk.
“They don’t see it as a necessity so they don’t take it,” the broker said.
Insurance providers in the region generally do not offer specific insurance against flooding and other potential weather-related damage and policies differ greatly in what they do and do not cover, the broker added.
In 2007, Cyclone Gonu – the strongest cyclone to hit the Arabian Sea – caused more than $4bn worth of damage in Oman alone.
The rain storms that have battered the UAE are due to continue until Thursday, according to the National Centre for Meteorology and Seismology (NCMS).
The fact of the matter is most of these 'natural calamities' could be protected against with fairly standard building regulations. We're hardly seeing the type of weather patterns experienced Oman with Gonu or New Orleans with Katrina. We're talking about an entire transport system, offices, shopping malls ... being brought to their knees by 48 hours of fairly heavy rain. I'd imagine most insurance companies wouldn't even pay up if building regulations are not in place to protect against flooding and/or leakage in the same way they wouldn't cover for theft if you left all of your doors and windows open. It's about time businesses start to be held accountable for their actions. I'm certainly not happy about living in a building where the developer claims it's setting 'new benchmarks in luxury' and yet the windows leak and the basement parking floods with every drop of rain.