UAE: Is insurance company allowed to refuse payout to injured third party?

Question: I am a worker at a construction company. Eight months ago, while pouring concrete at the construction site using a concrete pump owned by the company, the iron extension arm of the pump broke and fell on me, causing a permanent disability estimated at approximately 50 per cent. I requested compensation from both my company and the insurance company that insured the concrete pump. However, the insurance company refused to pay, claiming that I am not a party to the insurance policy between the construction company and the insurer. Is the insurance company legally entitled to refuse compensation?

Answer: The legislator has adopted a compulsory insurance system for motor vehicles for the benefit of third parties. This system grants third parties a direct personal right, giving them the capacity and interest to file a lawsuit against the insurance company of the vehicle that caused the accident and to demand compensation for the physical injuries or material damages they have suffered.

The company insuring the vehicle does not have the right to protest or apply exceptional conditions that reduce or exclude its responsibility to cover damages resulting from the use of the insured vehicle. This is because the injured party is considered a third party under the policy and derives their right directly from the law.

Article 19 of Federal Law No. 14 of 2024 on Traffic Regulation states that: “To license or renew the license of any vehicle in accordance with the provisions of this Decree-Law, the vehicle must be insured by one of the insurance companies licensed in the State, and must be insured for the benefit of a third party at least.”

Moreover, the same Article specifies that: “Insurance companies may not include any condition in insurance policies that would reduce or prevent coverage of their full civil liability arising from death, bodily injury, or material damage caused by the vehicle.”