UAE: Can my insurance deny a claim if the fire started in a neighbouring warehouse?

Question: I am an owner of a warehouse. A fire broke out in a warehouse next to mine and extended to my warehouse. I requested my insurance company to pay the compensation for the damages I suffered but the company refused on the basis that the fire did not break originally in my own warehouse but comes from outside. Does the insurance company have the right to reject my claim of compensation? Please advise.

Answer: The insurance company does not have the right to reject your compensation claim on such bases because the insurance company as per the insurance contract undertakes, upon occurrence of the event or the risk specified in the contract, to pay to the insured or the beneficiary the compensation agreed upon.

According to Article 1034 of the Civil Transaction Law No. 30 of 2020 (The insurer is bound to pay the insured amount or the sum due to the insured or the beneficiary, as agreed, upon occurrence of the risk or maturity of the period fixed in the contract.)

Moreover, Article (1037) of the same law in insurance against fire, specified the insurer’s liability for the following:

A - Damages resulting from fire even caused by earthquakes, thunderbolts, hurricanes, winds, cyclones, domestic explosions, damages caused by airplane and other air vessels crashes or whatever is customarily included in this class of insurance.

B - Damages, which are the inevitable result of fire.

C - Damages to things covered by the insurance by reason of salvage measures or of measures to prevent the extension of the fire.