UAE Law and Practice Contributed by: Farida Safwat, Elham Mobini and Ramy George, NHB Legal
4.2 Policy Wordings and Interpretation Developments A question that is commonly asked is how the UAE courts approach interpretation of a policy, particu- larly in relation to policy ambiguity, exclusions and endorsements. The UAE courts’ approach towards policy ambigu- ity, exclusions and endorsements is to constantly try to establish the parties’ common intention from the policy and if genuine ambiguity still persists after such an exercise, the courts will then apply the contra pro- ferentem principle as a last resort. This interprets such terms against the party that drafted the contract, and this returns to the fact that policies are considered a contract of adhesion. Despite the above, exclusions must be drafted in clear language, a contrasting colour (usually red), and be approved by the insured (by initials or a signature next to the exclusion), so that the court can consider it. As for endorsements, the courts will read them togeth- er with the underlying policy as a single contractual instrument. However, if an endorsement conflicts with the original wording, the courts will consider the endorsement to be the parties’ later expression of intent and will give it effect subject to being properly issued, referenced and accepted by the insured. Lastly, it is worth noting that the IDSRC’s reasoning, precedent court of cassation rulings, and jurispru- dential commentary – especially Al Sanhoury – are increasingly considered as a practical reference point when addressing ambiguity, exclusions and endorse- ments. 4.3 Cyber and Technology-Related Coverage Issues Due to the UAE economy’s heavy reliance on digital infrastructure and cloud-based services, new types of coverage disputes are arising. This returns to the fact that policyholders suffering losses from ransomware attacks, data exfiltration, or system outages are claim- ing under general property, business interruption or professional indemnity policies, without purchasing a standalone cyber-product to cover such issues. This further allows insurers to defend such claims by argu-
Grounds to challenge or set aside an award are limited to the exhaustive list in Article 53 of the UAE Arbitration Law, while foreign awards face the narrower grounds in Article V of the New York Convention. Neither route permits review of the merits, though a challenge on formal grounds – most often the standalone-agree- ment requirement – remains a live risk in the insurance context, given the recurring case law under Article 958 (4) of the UAE Civil Transactions Law. 4. Coverage Disputes 4.1 Evolving Trends in Coverage Disputes In general, coverage disputes are witnessing a signifi- cant evolution driven by regulatory reform such as the enactment of the Central Bank of the UAE, the CBUAE Law No 6 of 2025, introducing a new framework that provides new statutory requirements, particularly regarding disclosure obligations, claims notification, and mandatory coverage provisions, leading to a steady increase in the number of disputes. Climate-related losses remain a key source of cov- erage disputes, especially after the heavy rainfalls experienced in 2024 and the storms in mid-December 2025, which led to disagreements over whether such events fall within all-risks coverage or are excluded as “acts of God” or losses attributable to inadequate maintenance. In parallel, disruptions caused by geopolitical tensions have generated claims relating to business interrup- tion, delayed shipments, supply-chain disruption, and damage to insured properties. These events have prompted greater scrutiny of war risk, political violence, marine cargo, and business-interruption clauses, particularly where businesses have diverted shipments from the Strait of Hormuz to alternative land routes and incurred additional operational costs. Additionally, the digitalisation of the UAE economy is giving rise to disputes concerning cyber-related risks under traditional insurance policies, and the expan- sion of mandatory professional indemnity insurance is generating disputes over the scope of covered profes- sional acts.
273 I NSURANCE L I T IGATI O N 2026
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