UAE

Dubai retailers in insurance limbo after April floods

Four months into the process, numerous retailers in Dubai, which encountered disruptions to their operations due to the rains and flooding experienced in April, are yet to have their insurance claims processed.

Some of these retailers faced outright rejection of their claims, however, they are attempting to have their applications reassessed by the insurers.

This situation stands in stark contrast to the relatively efficient handling of claims and timely disbursement of payments to homeowners affected by the same event. Homeowners and insurers have reported that in the majority of cases, the processing and release of funds occurred by the first half of June.

Conversely, the progress regarding claims for affected retailers has been notably slow. While a majority of retailers have reopened their outlets that suffered water seepage, they highlight the significant revenue loss incurred during the period these were out of operation. Moreover, the delay in approval of these claims exacerbates the challenges faced in restoring the flow of cash for these retailers.

A senior figure in the industry attributes this delay to several factors. “A primary issue is the involvement of multiple parties, including landlords who might also claim damages to the building that houses the retailer’s outlet,” noted Avinash Babur, the CEO of InsuranceMarket.ae.

“The potential for overlapping claims coverage issues arises when both the property owner and the retailer make submissions. This situation necessitates a meticulous evaluation to identify which damages are the landlord’s responsibility versus those that fall on the retailer. Additionally, the intricacy of resolving commercial claims, which often encompass various types of coverage, such as property damage, business interruption, and liability, further complicates the process.”

More documents, steps involved

The complexity of the process is underscored by the meticulous requirements imposed by the insurance industry. Claims, whether they pertain to property ownership or retail operations, necessitate detailed submissions from the client, which must be independently verified by a loss adjustor.

Upon the appointment of a loss adjustor, the process commences with a comprehensive survey of the claim to ascertain its viability and the value of the claim to be approved. This rigorous evaluation process, though essential, can lead to delays in the disbursement of funds for retailer claims.

Babur noted, “In scenarios where the responsibilities of the landlord and tenant are clearly defined, the claims process tends to be more efficient. Conversely, in situations where responsibilities are shared or ambiguous, the claims process may become more convoluted and protracted. Additional evaluations and negotiations may be necessary to ascertain the appropriate coverage and liability.”

Despite these measures, there is no assurance of claim approval, a fact that retailers particularly fear. Even after re-submitting the claim or lodging it with the Central Bank of the UAE’s insurance sector ombudsman, who adjudicates complaints from individuals against their insurers, the process may extend further.

What gets covered for retailers

Retailers are predominantly remunerated for losses incurred to their property and inventory, as well as any damage to store equipment and inventory. The structural damage to the building or its premises is usually covered under the policy held by the landlord.

As a result, the insurance coverage for retailers typically centers on the contents of the store and any losses related to business interruption that may arise.

Related posts

UAE declares July 18th as Union Pledge Day in historic tribute

admin

Eid Al Adha 2024: A spectacular lineup of concerts and shows in the UAE

admin

Pension calculation in the UAE: What you need to know

admin

Leave a Comment