UAE Law and Practice Contributed by: Farida Safwat, Elham Mobini and Ramy George, NHB Legal
ing claims-handling practices and encouraging faster incident response and escalation. On the claims side, the growing threat of ransomware, social engineering and business email compromise is generating a steady rise in notifications, and early signs of collective or representative claims activity, though this remains less developed than in more mature litigation markets. On litigation strategy, insur- ers and insureds are increasingly focused on estab- lishing causation and quantifying loss early, given lim- ited settled UAE precedent on data breach damages, while insurers tighten cyber and liability wordings around unlawful data processing and regulatory-pen- alty exclusions as the UAE Data Office moves towards The UAE’s data centre sector is expanding rapidly, driven by AI infrastructure investment, cloud adoption and major hyperscale projects. This growth reflects a broader regional trend, with data centre electricity demand expected to increase significantly in the com- ing years, as AI and digital infrastructure requirements continue to expand. This growth is generating substantial new insurance demand, but also unprecedented risk accumulation; individual facilities can carry construction costs in the billions of dollars, requiring full replacement-value cover even where probable maximum loss scenarios are comparatively modest. Insurers are underwriting around the following key exposures: active enforcement. 8.4 Data Centres • power supply reliability – the leading driver of data centre business interruption losses, compounded by regional grid capacity constraints; • liquid cooling systems – an increasing source of water-damage claims as cooling demands rise with higher-density AI hardware, alongside broader water-scarcity considerations in the UAE’s climate; and • physical and security risk – sharpened by the 2026 regional conflict, which has exposed critical digital infrastructure to disruption from strikes on energy
and connectivity assets in a way not previously factored into risk models. Insurers are responding with more demanding loss- prevention requirements around fire protection and cooling system design, and closer scrutiny of aggre- gation across data centre campuses and “availabil- ity zones” previously treated as independently rated risks. 8.5 Social Media Risk The most significant UAE-specific development is regulatory, not litigation-driven. Building on the Child Digital Safety Law (Federal Decree-Law No 26 of 2025, in force since 1 January 2026), the UAE Cabi- net issued Resolution No 106 of 2026 on 17 June 2026, prohibiting children under 15 from creating or using personal social media accounts and mandat- ing robust, auditable age-verification mechanisms on which self-declaration of age is expressly invalid. Platforms have a 12-month transition period, with the authorities empowered to escalate warnings to partial or full-platform blocking for non-compliance. This framework differs materially from the product- liability litigation seen elsewhere, where platforms face large-scale claims alleging addictive design has caused harm to adolescent mental health. The UAE has instead moved directly to a regulatory age-gating model, and there is no comparable case law or claims activity targeting platforms at this stage. For insurers, the immediate relevance is less about new liability products and more about compliance exposure for platform operators, internet service pro- viders (ISPs) and advertisers – potential regulatory penalties, and downstream PI or D&O questions if a covered entity fails its age-verification obligations once the transition period ends in mid-2027. 8.6 Next Generation Nuclear Next-generation nuclear technologies are introduc- ing risk variables the market has never priced before. Small modular reactors (SMRs) and advanced modu- lar reactors (AMRs) bring first-of-a-kind construction risk, unresolved supply-chain and fuel-form variability, and multi-unit deployment models that were not taken into account in the design of existing capacity limits.
282 I NSURANCE L I T IGATI O N 2026
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