When does UAE law make your business pay for harm?

When does UAE law make you pay for harm?

When your act causes harm to someone else. The Civil Transactions Law says every act causing harm to another obliges the person who did it to compensate for the damage.¹ The rules apply to companies as well as individuals.¹

If you cause the harm directly, you are liable without any further condition. If you only caused it indirectly, you are liable only if you trespassed, acted intentionally, or your act led to the harm.¹

Are you liable for what your staff do?

Yes, when they do it while carrying out their duties or because of them. The law makes a principal liable for harm caused by a subordinate in the course of their work.¹ You can then recover from the employee to the extent the employee is liable.¹

Are you liable for your premises, machinery and animals?

Yes, if you control them. The person with actual control of a thing is its guardian, and the owner is presumed to be the guardian.¹

What can a third party claim for?

Physical injury, damage to property, lost profit and moral harm. Compensation covers the loss suffered and lost profit that follow naturally from the harmful act.¹ Moral harm includes harm to a person’s freedom, honour, reputation, social standing or financial status. Spouses and relatives up to the second degree can claim for moral harm from a death or incapacity.¹

Where blood money (diyah) is due, the court can award more if the death or injury caused material or moral harm the diyah does not cover.¹

Can you avoid liability?

Not by contract. A clause that excludes or reduces liability for a harmful act is void.¹ You are not liable if you prove the harm came from an external cause, such as force majeure, the act of a third party or the act of the injured person.¹ A court can reduce compensation if the injured person contributed to the harm.¹

How long does someone have to claim against you?

3 years from the day they learned of the damage and who was responsible, and never more than 15 years after the harmful act.¹ Work out the dates with the claim time limits calculator.

What does the law say about liability insurance?

Your insurer’s duty to pay only arises once the injured person makes a claim against you.¹ The policy can let the insurer refuse to pay if you admit liability or pay the claimant without its consent.¹

Tell your insurer before you say or pay anything to a claimant. The steps are in how to make a claim.