UAE Law and Practice Contributed by: Farida Safwat, Elham Mobini and Ramy George, NHB Legal
8. Emerging Risks 8.1 Market Overview of Emerging Risks The risks generating most of the underwriting and claims activity in the UAE market share a common feature: they are systemic rather than isolated and moving faster than policy wording and regulatory frameworks can comfortably absorb. The most sig- nificant are: • geopolitical and war-related risk (discussed in 7.5 Forward Outlook and Market Response ); • data protection and cyber-exposure, against active UAE regulatory enforcement; • the rapid build-out of data centre and AI infrastruc- ture, and its associated property, business inter- ruption and aggregation exposures; • ESG-linked underwriting and litigation risk, particu- larly in construction, real estate and energy; • new UAE-specific child digital safety regulations reshaping platforms and, potentially, insurer liability exposure; and • the UAE’s expanding nuclear and advanced-reac- tor programme, raising long-tail liability and capac- ity questions. Across these areas, coverage issues cluster around definitional gaps in wording drafted before these exposures existed, and around aggregation – whether correlated, but formally separate, risks fall under one policy limit or several. Left unresolved at placement, these gaps tend to resurface later as disputes over scope of cover and causation. On the advisory side, this is generating growing demand for pre-placement wording review, exclu- sion drafting, and coverage opinions, as parties seek certainty before, rather than after, a loss. It is also pushing insurers towards more granular underwriting and greater reliance on specialist technical expertise across underwriting and claims handling. 8.2 Impact of ESG on Underwriting and Insurance Litigation ESG regulation in the UAE has entered a new phase, with climate-related obligations increasingly backed by binding legislation. Federal Decree-Law No 11 of 2024 on the Reduction of Climate Change Effects
came into force at the end of May 2025, with a one- year transition period requiring compliance by the end of May 2026. The law has introduced mandatory GHG measure- ment, monitoring and reporting obligations, with administrative penalties from AED50,000 to AED2 million, doubled for repeat violations. This comple- ments the CMA’s mandatory ESG disclosure regime for Dubai Financial Market (DFM)- and Abu Dhabi Securities Exchange (ADX)-listed companies, and the ADGM’s ESG disclosure framework for regulated entities. For insurers, this evolving landscape is increasing underwriting scrutiny of climate-related exposures, particularly in construction, real estate and energy, while placing greater emphasis on governance, dis- closure controls and regulatory compliance in D&O and PI underwriting. Underwriters are also paying closer attention to the accuracy of ESG disclosures and emissions data, given the potential for misrepresentation and disclo- sure-related claims. Although greenwashing and ESG- related disputes remain relatively limited in the UAE, mandatory, penalty-backed climate reporting is likely to increase regulatory scrutiny and may, over time, give rise to enforcement actions and associated insur- ance claims. 8.3 Data Protection Laws The UAE’s Federal Decree-Law No 45 of 2021 on the Protection of Personal Data (“PDPL”), together with the equivalent DIFC and ADGM regimes (DIFC Law No 5 of 2020 and ADGM Data Protection Regulations 2021, both as amended), are now core underwriting considerations for cyber, professional indemnity and D&O business, particularly in data-intensive sectors such as health-care, education and retail. Insurers are assessing insureds’ data governance and cybersecurity maturity more rigorously, with weaker controls translating into higher premiums, sub-limits, or declinature. The PDPL’s mandatory breach notifi- cation requirements, together with the more detailed timelines applicable in the DIFC and ADGM, are shap-
281 I NSURANCE L I T IGATI O N 2026
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