The two recent major fires at the Al Quoz industrial area have highlighted the need for companies to take out insurance, say experts.
“It should be compulsory for companies to have insurance,” said Ashok Sardana, Managing Director of Continental Insurance Brokers.
“There should be insurance checks when trade licences are renewed – licences should not be renewed unless companies are insured,” he said.
He said if companies had insurance then there would be no danger of them becoming complacent and less safety-conscious.
“It is usually the companies that have insurance follow safety procedures and are careful, they are the ones who are more likely to have stringent safety rules and regulations,” he added.
“It is those companies that do not have insurance that are careless and do not adhere to regulation or care about fire safety.”
Michael Walton, Director of General Insurance at Nexus, said: “The recent fires in Dubai should act as a reminder to business owners of the importance of insurance, which provides people with the right resources to ensure business continuity.”
Eight people died, 83 warehouses were destroyed and up to Dh600 million of damage was caused by the first blaze, which started at an unlicensed fireworks warehouse on March 26. The second fire on Thursday devastated a paint store. More than 200 buildings in Deira were destroyed in a blaze last Wednesday and many smaller fires broke out in February and March.
The Emirates Insurance Agencies says 14,000 fires occurred in the UAE between 2002 and 2007.
Michael said: “The cost of rebuilding, lost stock and machinery plus documents that have been destroyed and running a company while moving to a new location all take a high financial toll on the company.
“If we can encourage a wider discussion about insurance it could help to inculcate a stronger business culture of risk management.
Companies need to fully assess the extent of the risks to their businesses, reduce risks where possible and ensure that they have sufficient insurance to cover the costs of restoration. Under-insurance is as much an issue as no insurance – companies need to fully evaluate the business assets that need insuring.”
Sardana said insurance companies in the UAE do not carry out as many spot checks as those in Europe and the United States.
Fires take a heavy toll on the uninsured