Insurance companies do not refuse to accept insurance for paper, plastic and cardboard factories, as long as the latter adhere to acceptable safety standards and means, said the Emirates Insurance Federation (EIF).
High premium rates for insuring such factories are due to the absence of safety requirements at the required level, according to the EIF general insurance committee chairman Ahmed Nasef.
He told Emirates Today that while obtaining licences and certificates from civil defence authorities for these factories is important for insurance companies, greater requirements must be in place to ensure safety, given the degree of risks in such factories. It is the non-compliance with these requirements in some of the factories that is the reason for the high insurance premiums.
Mr Nasef said, “All insurance companies have insurance products that cover factories and companies in all sectors, provided that there are satisfactory and sufficient safety standards, especially in factories that produce highly flammable materials, such as plastic, paper, cardboard, etc.
“Certificates issued by civil defence authorities are a requirement at the first safety level. This is a basic condition. Insurance companies also have additional requirements and standards before they approve insurance coverage, which are in the interests of the insured and the benefit of insurance companies so that they do not incur major losses, due to the absence of the necessary safety standards.”
He said that these industries bear a serious risk level because the frequency and scale of disasters are higher in paper, plastic and cardboard factories compared to other sectors.
He said that insurance companies work with clients to clarify the types of safety controls required, and how factories could be better maintained to ensure appropriate and acceptable standards for insurance coverage.
Reinsurance companies play a role here too because they demand certain standards to be met in risk management before they accept business from insurers. M