Business Interruption Insurance in Dubai: Claims Preparation Checklist for SMEs
In Dubai, small and medium-sized enterprises need a clear strategy in case of a sudden business shutdown. Business interruption insurance, or business income coverage, closes the revenue gap after a triggering event, when direct physical damage or an order from the civil authority makes work impossible. The policy compensates for lost profits, continuing expenses, and extra expenses, and may also include payroll coverage, taxes, and loan payments within coverage limits and subject to deductible and exclusions. The key to a successful payout is proper preparation for claim preparation before the incident and accurate recording of the facts.
What Exactly is Covered and How Does the Period of Indemnity Work?
It is based on the replacement of business income and the payment of fixed expenses that continue to “flow”, such as rent, utilities, part of the overhead. The policy may additionally cover wages, temporary relocation to a temporary location, replacement of equipment and training staff, as well as a refundable extra expense to keep operations afloat. An important module is professional fees coverage for the work of a forensic accountant and other specialists who help collect and justify calculations. All this is valid within the period of indemnity, which starts from the date of the insured event and ends when normal operation is restored or after a pre-agreed period, including a possible extended period of indemnity. Endorsements on civil authority and ingress and egress restrictions/access are available for a number of policies when there is no direct damage on the site, but the business is closed by order or customers are physically unable to get to you.
Application Preparation Checklist: Documents, Accounting, Communication
Start with the contingency plan. Determine which data and primary data you will collect “hot on the trail”, and not in months. Set up separate analytics in the accounting system for relevant costs, key correspondence, contracts, and meeting minutes; keep a timeline of significant events. Keep a basic documentation checklist handy and think in advance about how you will interact with adjuster during the investigation: who is responsible for collecting evidence, who supports open communication, and how all exchanges are recorded. This discipline reduces the time for quantification and reduces the risk of “lost” amounts.
Loss Assessment: MFL/PML, Extra Expense And Form Selection (Gross Earnings Vs Gross Profit)
Before the incident, model realistic loss scenarios based on locations and events, calculate maximum foreseeable loss (MFL) and probable maximum loss (PML). Connect a forensic accountant as it will help you build a methodology comparable to how you will defend a claim. At the same time, evaluate the content business interruption: dependence on sole supplier, the second “echelon” of suppliers, and the interpretation of “direct supplier” in conditions that are critical for scenario coverage. Determine where the risk is loss of sales (then BI is needed), and where sales can be kept at the expense of extra expense (sometimes this is enough and cheaper). Finally, choose the form you need, whether gross earnings, which usually lasts until repairs are completed with due diligence and dispatch, gross profit, which is limited to the period of indemnity, or business income, which is the modern equivalent in ISO practice. The goal is the same everywhere, which is to correctly protect earnings, and the extended period to recover sales closes the tail of demand recovery.
UAE Context, Limits, Exceptions, and Legal Trends
To calculate coverage limits, take into account the estimated duration of downtime before restart, the reliability of the building and fire extinguishing systems, the speed of the temporary location search, the level of daily operations and wages, and the value of the equipment. Typical exclusions include undocumented income, partial shutdown, power outages, as well as events requiring a separate policy (earthquake, flood, pandemic). At the same time, it is important to comply with regulatory requirements for labor risks in the UAE where workers’ compensation is enshrined in the UAE Labor Law and fits into the overall continuity and risk management system.
The bottom line for SMEs in Dubai
Structure the policy to fit your real risk profile: check the endorsements for civil authority and ingress/egress, coordinate the period of indemnity and possible extended period, write down professional fees coverage and the procedure for interacting with the claim team. Maintain a live documentation checklist and separate accounting system, calculate MFL/PML and content risks in advance. Then, when the triggering event is triggered, you will submit a reasonable, timely and provable claim — and return the business to stable revenue faster. Partner with one of the renowned insurance brokers in Dubai for better insight and guidance.
