Question: Four months ago, a fire broke out in one of my stores. Based on the report furnished by the competent authority, it was clear that the fire was caused intentionally and the person responsible for the act was arrested. My question is: Does the insurance company have the right to disclaim its responsibility and refrain from paying compensation on the pretext that the one who had caused the fire had been arrested?
Answer: Federal Law No (5) Of 1985 On the Civil Transactions Law of the United Arab Emirates, under Section III, Article (1034), states: The insurer is bound to pay the insured amount or the sum due to the insured or the beneficiary, as agreed upon, in case of occurrence of risk or upon maturity of the period as fixed in the contract.
Section III: Provisions Relating to Certain Classes of the same law states:
For insurance against fire, the insurer is liable for the following: A) Damages resulting from fire even those caused by earthquakes, thunderbolts, hurricanes, winds, cyclones, domestic explosions, or damages caused by air planes and other air vessels, crashes or whatever is customarily included in this class of insurance. B) Damages that are the result of fire. C) Damages to things covered by insurance or measures to prevent the extension of the fire. D) Disappearance of items covered by insurance, occurring during the fire, unless it is established that this was caused due to theft.
Article (1037) states: The insurer is liable for damage resulting from the unintentional fault of the insured or the beneficiary. Article (1038) states: Notwithstanding any agreement to the contrary, an insurer is not liable for damages caused deliberately or fraudulently by the insured or the beneficiary. Article (1039)
The insurer is liable for damage caused by persons for whose acts the insured is responsible, whatever be the nature of their fault. Article (1040) states: The insurer is liable for damages resulting from fire, even if the fire broke out owing to a defect in the thing insured.
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Article (1041) states: Regarding the above provisions, the liability of the insurer for compensation is existent, except for the case mentioned in Article 1039 above (an insurer is not liable for damages caused deliberately or fraudulently by the insured or the beneficiary).
According to Dubai High Court, the liability of the insurer (the insurance company) for payment of compensation is based on the insurance contract and not on default circumstances, which could arise out of error, damage and causation, given that the insurance contract prevails in a compensatory nature and aims to compensate the insured for the damage that he or she suffers as a result of the insured risk within the limits of this damage. (No 2012/298 Civil cassation)