What insurance does your contractor need for building or fit-out works?

What insurance does a Dubai construction permit need?

A policy from an insurance company that covers the works and civil liability towards third parties. Since Executive Council Resolution No. 28 of 2022, a contractor must submit this policy to get a permit for building construction, alterations or additions of 300 sq m or more, demolition or shoring.¹ The rule applies across Dubai, including free zones and special development zones such as the DIFC.¹

The policy replaces the security deposits and financial guarantees authorities used to collect from contractors for permits.¹

Which works does it apply to?

The Dubai Development Authority lists building construction and related activities, modifications and additions of 300 sq m or more, demolition and shoring, for permits issued from 1 September 2022.²

How long must the policy run?

For construction, alterations and additions, from the permit date until one year after the completion certificate. For demolition and shoring, until the completion certificate.² The policy cannot be cancelled or changed during that time without the approval of Dubai Municipality or the permit authority.¹

How is this different from your own public liability policy?

A contractors’ policy covers one project: the works themselves and liability arising from carrying them out.¹ Your public liability policy covers your business’s day-to-day operations. GIG Gulf’s public liability section, for example, does not cover damage to the part of a property you are working on that arises from that work.³

What do free zones and landlords add?

RAKEZ requires three covers before building works start. The first is for the works, plant and materials at full reinstatement value plus 10%. The second is public and third party liability for damage to property and for injury or death, at a limit RAKEZ prescribes, for any occurrence during 3 years from the Operation Fitness Certificate. The third is workers’ compensation for the contractor’s and subcontractors’ staff on the works.⁴

Dubai South’s 2017 tenant fit-out manual asks the fit-out contractor for contractors’ all risks and public liability cover of at least 125% of the fit-out cost for any one incident, unlimited in aggregate, for the duration of the works.⁵

Before work starts, get a copy of the contractor’s policy and check the period, the third-party section and the limit against your permit and your lease. The fit-out permits guide lists more landlord rules.