BAHRAIN Law and Practice Contributed by: Mohamed Shaban, Mohsin Al Alawi and Qassim Al Fardan, Hassan Radhi & Associates
Hassan Radhi & Associates Office 91 & 92 Building 372
Road 4611 Block 346
Manama Sea Front Kingdom of Bahrain Tel: (+973) 17 535 252 Fax: (+973) 17533358
Email: info@hassanradhi.com Web: www.hassanradhi.com
1. Key Drivers and Resolution of Insurance Disputes
1.2 Role of Policy Wording and Drafting Policy wording contributes materially to insurance disputes in Bahrain. However, the difficulty often lies not only in the meaning of a particular clause but also in how the policy has been drafted, structured and presented. Problems may arise where standard international wordings are adopted without sufficient adaptation to Bahraini law, where the schedule and endorsements are inconsistent with the general condi- tions, where there are discrepancies between Arabic and English versions, or where the contractual hier- archy between different policy documents is unclear. Article 696 of the Bahrain Civil Code is particularly important. Conditions relating to invalidity, forfeiture of the insured’s rights or arbitration may not be invoked against the insured unless they have been prominently highlighted, such as through block lettering or larger print. Articles 697 and 698 provide further protection against certain late-notification provisions and arbi- trary or insufficiently specific exclusions. Recurring areas of contention include exclusions, noti- fication requirements, non-disclosure or misrepresen- tation, warranties and conditions precedent, deducti- bles, policy limits, aggregation provisions, causation wording, claims-made provisions and arbitration clauses. Insurers should therefore consider not only whether the intended protection appears somewhere in the policy, but whether it has been drafted and pre- sented in a manner that makes it legally enforceable.
1.1 Common Triggers of Insurance Disputes Motor insurance disputes represent the largest cat- egory of insurance disputes by volume in Bahrain. This is principally because third-party motor liability insurance is compulsory and motor accidents gener- ate a continuous flow of claims. Disputes commonly concern responsibility for the accident, repair costs and methods, depreciation, total-loss valuation, bod- ily injury compensation, compliance with claims pro- cedures and delays in settlement. By value and complexity, significant disputes also arise under property, fire, engineering, construction, marine, cargo, medical and professional liability poli- cies. These disputes are more likely to concern cau- sation, the application of exclusions, the adequacy of disclosure, the valuation of loss, policy limits and the conclusions reached by loss adjusters or techni- cal experts. The overall pattern has not materially changed in recent years, and motor insurance remains the prin- cipal source of claims by number. However, the mar- ket is gradually encountering more specialised issues arising from professional indemnity, cyber-risks, tech- nology failures and, more recently, war and political violence risks. These claims may be fewer in number but tend to involve higher values, more complex policy wording and a greater cross-border or reinsurance element.
11 I NSURANCE L I T IGATI O N 2026
CHAMBERS.COM
Powered by FlippingBook