Insurance Companies, Covid Leaves, End of Service

July 6, 2021

Insurance Companies are Liable

When as per the Law, an insurance company has to pay the compensation then he has to pay. When an insurance company has to pay then he has no right to back out or refuses to pay. It is always made part of the insurance agreement that the company will compensate the customer, as per the agreed terms between the company and the customer. The nature of the contract is a compensatory contract, where the risk is covered by the company. That is why the customer/insurance taker pays a premium which can be monthly or annually to the insurance company. If the insurance company does not pay the customer when he deserves it as per the contract then he has a right to file a case against the company. When a Civil Case is filed in this regard then the plaintiff has full rights like other Civil Cases to demand the legal expense and legal interest. All such things are up to the court’s decision. So what we have learnt from here is that Insurance Companies have no reason to reject the claims of customers. Second, there is a timeline, a claim is valid and not expired. When insurance is over then the customer has no right to ask for compensation. The Law Article 1034, which is” insurer is bound to pay the insured amount or the sum due to the insured or the beneficiary, as agreed, upon the occurrence of the risk or maturity of the period fixed in the contract” clearly tells us that the insurance company/insurer has to compensate the customer as per the agreed terms, which should be legitimate as per the Law, agreed by both parties, the time it is required. Countries like the United Arab Emirates do not allow any kind of company to exploit the rights of beneficiaries/customers/employees. Articles 1040 and 1041 also clear that the insurer will pay the cost of unintentional damage or loss of the beneficiary.

There are many companies operating in the UAE and they are offering life insurance to any kind of insurance. It is seen a few times when an insurance company has to pay the beneficiary then they come with lame excuses like they do not want to pay and find ways to get an escape. Escape is not possible at all. Therefore it is said above that the Insurance Company has no right to refuse the customer/beneficiary when he deserves it.

COVID-19 Leaves  

If an employee has been affected with COVID-19 or also called as COVID-Positive then he or she has to be isolated. He/she can take 15 Days off with Full Salary and 30 Days Off with Half Salary, as per Article 83 of UAE Labour Law. It is derived from the already existing UAE Labour Law Rule as per Article 83, which says after the completion of the probation period, an employee can take 90 Days off due to sickness as 15 Days with full salary, then 30 days with half salary and then rest of the days with zero salary. But an employee has to work continuously 3 months after the completion of his probationary period. During a probation period, no sick leave is allowed.

There is another scenario that needs to be discussed and that is the sickness that comes during the annual leaves. In this scenario, sick leaves will be considered part of annual leaves. Article 77 of Law, explains this situation in legal terms.


UAE Labour Law says gratuity has to be paid at the end of the service. When a service is going to be ended then employees should be paid the gratuity and all end of service benefits. Usually, it is paid the time VISA is cancelled, by Cash or Cheque. With the consent of both parties, it is not a bad option. We suggest that Cash must be made ready by the time the employee has to sign the cancellation agreement. It’s a good time to pay the end of services e.g. gratuity etc as well as get the cancellation paper signed. As per the Law, there must be no break for calculating the gratuity. From the time the employee started the service and the day the employee got it ended, the employer has to pay the end of service amount as per the recommended calculation formula by UAE Labour Law. As per the Law, employees can also ask for the end of service during the service e.g. the time of ending one contract and before renewing the contract. Law gives this right to the employee and the employer is also not restricted or bound to pay at any cost. The employer has also the option to refuse the employee on this demand.      

The outstanding on the Bank Loan:  

UAE commercial transaction law Article 76 tells us that the creditor is allowed/eligible to receive the interest on a commercial loan which is and should be as per the rate of interest mentioned in the contract. If intentionally or by mistake the rate of interest is not mentioned in the contract, then it is decided as per the rate of interest implemented in the market but the time the deal was done/made, provided that the rate of interest will not be more than 12% till the time of full settlement. Article 77 makes addition and states that” Where the contract stipulates the rate of interest and the debtor delays payment, the interest on the arrears shall be calculated on the basis of the agreed rate until full settlement”. When there is a requirement to file the Case then a person can file the Case and demand the court to hire an expert for checking and right calculation of the amount as well as all the related items. This case is called the Bank Expert Appointment Dispute Case.  

Cases on Cheque Bounce:

When a cheque is bounced e.g. Current Dated or the Post Dated then a police complaint can be lodged against the signatory. After getting the complaint number from the police station the matter can be taken to public prosecution and criminal court. Along with the Criminal Case, the Civil Case can also be opened against the drawer/signatory. This is the right of the person who is given a cheque that is not credited.