BAHRAIN Law and Practice Contributed by: Mohamed Shaban, Mohsin Al Alawi and Qassim Al Fardan, Hassan Radhi & Associates
8. Emerging Risks 8.1 Market Overview of Emerging Risks The most significant emerging risks for the Bahraini market are geopolitical and war-related exposure, cyber and data risk, technology dependency, opera- tional resilience and the gradual adoption of AI. These risks are significant because they may affect several sectors simultaneously and do not always fit easily within policy wordings originally designed for conven- tional physical events. The market is likely to reach a more settled response once the present geopolitical conditions and result- ing claims have been assessed. War-risk and political violence products may become a more routine part of regional insurance programmes if demand remains high. Alternatively, they may return to being special- ised products if the perceived risk diminishes. Advisory work is increasingly focused on identifying gaps between conventional policies and emerging exposures, reviewing exclusion wording, co-ordinat- ing direct and reinsurance coverage, and ensuring that notification is made across all potentially responsive policies. Disputes are likely to concentrate on causa- tion, aggregation, overlapping cover and whether the loss falls within a specialist or conventional policy. 8.2 Impact of ESG on Underwriting and Insurance Litigation ESG considerations have not yet generated a signifi- cant or distinct category of insurance coverage litiga- tion in Bahrain. Our firm has not observed a material volume of disputes concerning ESG misrepresenta- tion, climate disclosures, greenwashing or specialised ESG exclusions. The present effect is more indirect. Insurers may con- sider environmental compliance, corporate govern- ance, occupational safety and sustainability practices during underwriting, particularly for major industrial, construction and financial risks. Deficiencies in those areas may affect pricing, deductibles, risk-improve- ment conditions or the insurer’s willingness to offer cover.
Existing doctrines concerning disclosure and mis- representation could apply where an insured fails to disclose a material environmental or governance risk. However, the dispute would presently be ana- lysed under conventional insurance and contractual principles rather than a separate ESG regime. More specific disputes may emerge as corporate sustain- ability reporting and sector-specific environmental obligations develop. 8.3 Data Protection Laws The Bahrain Personal Data Protection Law, Law No 30 of 2018, has materially affected how insurers collect, use, retain and disclose personal data. This is par- ticularly important in medical, life, motor and liability insurance, where the insurer may hold health informa- tion, accident reports, identification documents and other sensitive personal data. Health information is expressly treated as sensitive personal data. Insurers must ensure that data is processed fairly, for a specific legitimate purpose and only to the extent relevant and not excessive. Sensitive data ordinarily requires consent, although the law permits processing where necessary to pursue or defend legal claims and in specified healthcare circumstances. This affects underwriting questionnaires, claims forms, medical authorisations, data-sharing arrangements, outsourcing and cross-border expert or reinsurer communications. In litigation, parties must balance the need to disclose evidence against data minimisa- tion and confidentiality obligations. Cyber incidents also require insurers to assess whether personal data can be shared with forensic experts and advisers, and whether the incident triggers both coverage and regu- latory obligations. 8.4 Data Centres Our firm is not aware of a developed body of Bahraini insurance litigation concerning data-centre losses. However, the expansion of digital infrastructure cre- ates interconnected property, equipment breakdown, cyber, professional liability and business interruption risks.
21 I NSURANCE L I T IGATI O N 2026
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