D&O and Professional Indemnity Insurance in the UAE: A Guide
How directors' and officers' liability and professional indemnity cover work, who needs them, and what claims-made means.
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Directors, managers and professional firms can face claims over decisions and advice that cause others financial loss, even when no one is injured and nothing is damaged. Directors' and officers' (D&O) liability insurance and professional indemnity (PI) insurance cover these claims and the legal costs of defending them. This guide explains both for UAE businesses. It's written by Al Berwaz Insurance Brokers, licensed by the Central Bank of the UAE (Registration No. 081).
Directors' and officers' (D&O) liability
The UAE Commercial Companies Law (Federal Decree-Law No. 32 of 2021) holds company managers and board members liable to the company, its shareholders and third parties for acts such as fraud, misuse of their powers, and breaches of the law or the company's articles. Claims can come from shareholders, regulators, creditors, employees or liquidators, and directors can be personally liable.
How a D&O policy pays
- Side A: pays directors and officers directly when the company can't or won't indemnify them, for example if it's insolvent.
- Side B: reimburses the company when it indemnifies its directors.
- Side C: covers the company itself for securities claims. Usually relevant to listed companies.
- Investigation costs: legal costs of responding to a regulator's investigation, where included.
Professional indemnity (PI)
PI covers claims that a mistake, negligent advice, design error or omission in your professional services caused a client financial loss. It suits engineers, architects, project managers, consultants, IT firms, accountants and other advisers. Clients and government entities often require a minimum PI limit in their contracts. Healthcare professionals in the UAE must hold medical liability insurance, usually called medical malpractice cover.
Claims-made cover and the retroactive date
D&O and PI policies are usually written on a claims-made basis: the policy in force when the claim is made responds, not the one in force when the work was done. A retroactive date sets how far back covered acts can go, so keep cover continuous when you renew or change insurer. If you stop trading or retire, ask about run-off cover for claims that arrive later.
What isn't usually covered
- Fraud or deliberate wrongdoing, once proven
- Fines and penalties that can't legally be insured
- Claims or circumstances you knew about before the policy started
- Bodily injury and property damage, which belong under liability policies, unless specifically included
- Contractual guarantees or penalties beyond your legal liability
How premiums are calculated
For D&O, insurers look at company size, financial position, sector, ownership, whether it's listed, and claims history. For PI, they look at your profession, fee income, the types of projects and clients, contract values, the limit you choose and claims history.
What to prepare for a quote
- Financials: the latest audited accounts.
- Business: activity, ownership structure and countries of operation.
- Fees (for PI): annual fee income by service, and your largest contracts.
- Contracts: any clauses that set required insurance limits.
- Claims: any claims, or circumstances that could lead to one.
Why use a broker?
D&O and PI wordings vary more than most policies, especially exclusions, retroactive dates and defence costs. A broker compares wordings, not just price, and helps you notify circumstances correctly so claims aren't refused. Broker commission is built into the insurer's premium, so using a broker doesn't add to your cost.
Related:Financial lines insurance · Liability insurance guide · All guides
Got questions? We've got answers
Quick answers to other questions businesses ask us about D&O and professional indemnity.
Ask Us a QuestionDoes a limited liability company (LLC) need D&O insurance?
It isn't compulsory, but managers of LLCs can face personal claims under the Commercial Companies Law, just like directors of joint stock companies. D&O protects their personal assets.
Is professional indemnity insurance mandatory in the UAE?
For healthcare professionals, medical liability insurance is mandatory. For other professions it depends on your regulator, licence and contracts, and many clients and tenders require it.
What does "notify a circumstance" mean?
If you become aware of something that could lead to a claim, such as a client complaint or a project defect, you tell the insurer during the policy period. A later claim arising from it is then covered by that policy.
Is cyber insurance the same as professional indemnity?
No. Cyber insurance covers your own costs and liabilities after a data breach or cyber attack, such as recovery, notification and business interruption. PI covers mistakes in your professional services. Some firms need both.
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✓ Licensed by the Central Bank of the UAE (Reg. No. 081)
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Sources:UAE Federal Decree-Law No. 32 of 2021 on Commercial Companies. Checked October 2026.
This guide is general information, not legal or financial advice. Terms differ between insurers. Cover is subject to the policy terms, conditions and exclusions of the issuing insurer.