Insurers cold to warehouses
Warehouses in the UAE are considered as a “high risk” for insurance firms and many do not provide coverage for them, an insurance company manager has said.
Howden Insurance Brokers told Khaleej Times that warehouses have too many hazards, making them a high risk insurance prospect. There are only a few companies that actually provide commercial insurance to warehouses.
Recently 12 warehouses in Sharjah’s industrial area 13 were gutted in a fire, adding to the several incidents of warehouses catching fire. These warehouses usually contain hazardous materials, such as plastic, wood and gasoline.
Legally, however, warehouses must be insured in order for the owner to renew his trade licence.
Shailesh Das, deputy manager at Howden Insurance Brokers, said: “We don’t provide warehouse insurance, but there are a few insurance companies that take the risk of insuring warehouses. But very few want to give insurance to warehouses in areas such as Al Quoz, Sharjah or Ajman.
“Most of the companies consider these warehouses a high risk venture. They don’t want to give insurance to someone stocking goods such as plastic or wood. They also look at the warehouse’s neighbours. If those are also a prospective hazard, insurance companies don’t take that risk.”
Das said that if warehouses want to be successfully insured, owners have to ensure that necessary safety measures are in place to mitigate the risk of fire hazards. Its security and safety system needs to be really advanced.
One of the few companies insuring warehouses is Orient Insurance Company. They, too, insure only on the condition that warehouses also insure other sectors of their organisation, for instance, motor, property and medical insurance.
Sandeep Rathore of Orient Insurance said: “We are okay with giving insurance to warehouses, but not standalone. This means the company must insure their other sectors, such as motor and medical insurance. We are restricted in insuring only a warehouse, as it’s not a good risk to take.
“If warehouses want to be covered, they need to make sure that their safety measures are in line with civil defence rules.”