Executive Council
Resolution No. (28) of 2022
Concerning the Insurance Policy Required for Licensing
Construction Works in
the Emirate of Dubai[1]
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We, Hamdan bin Mohammed
bin Rashid Al Maktoum, Crown Prince of Dubai, Chairman of the Executive
Council,
After perusal of:
Federal Law No. (6) of 2007 Regulating Insurance Business and its
amendments;
Law No. (3) of 2003 Establishing the Executive Council of the Emirate of
Dubai;
Law No. (1) of 2016 Concerning the Financial Regulations of the
Government of Dubai and its Implementing Bylaw;
Law No. (5) of 2021 Concerning the Dubai International Financial Centre;
Decree No. (22) of 2009 Concerning Special Development Zones in the
Emirate of Dubai;
The Order of 1961 Establishing the Dubai Municipality;
Executive Council Resolution No. (26) of 2020 Approving a Set of
Economic Growth Stimulus Initiatives in the Emirate of Dubai;
Local Order No. (3) of 1999 Regulating Construction Works in the Emirate
of Dubai and its amendments; and
The Legislation establishing and regulating free zones in the Emirate of
Dubai,
Do hereby issue this Resolution.
The following words and expressions, wherever mentioned in this
Resolution, will have the meaning indicated opposite each of them unless the
context implies otherwise:
|
Emirate: |
The Emirate of Dubai. |
|
DM: |
The Dubai Municipality. |
|
Competent Entity: |
An entity legally authorised to license Construction Works in the
Emirate. This includes,
without limitation, the authorities supervising Special Development Zones and
free zones, such as the Dubai International Financial Centre. |
|
Contractor: |
A natural or legal person who is licensed, in accordance with the
legislation in force, to practise the contracting profession in the Emirate. |
|
Permit: |
A document which authorises
the implementation of Construction Works in the Emirate, and is issued by the DM or the Competent Entity in
accordance with its functions under the legislation in force. |
|
Construction Works: |
These include the construction or demolition of buildings; any modification or addition thereto; shoring works; and any other Construction works
determined by the DM in coordination with the Competent Entity. |
|
Insurance Policy: |
A contract concluded by an Insurance Company and a
Contractor whereby the insurance company is obligated, in return for
the premium paid by the
Contractor, to compensate him for any damage or
loss resulting from the risks covered by the Insurance Policy in accordance
with the provisions of this Resolution. |
|
Insurance Company: |
A company licensed to operate in the United Arab Emirates as an
insurance provider. |
This Resolution applies to:
1.
all areas within the
Emirate, including Special Development Zones and free zones, such as the Dubai
International Financial Centre;
2.
the Construction Works
for which a Permit is issued after the effective date of this Resolution; and
3.
the Contractors who
implement Construction Works in the Emirate.
This Resolution aims to:
1.
alleviate the financial
burdens incurred in obtaining Permits by cancelling the security deposit
requirement
prescribed for their issuance;
2.
contribute to promoting the
Construction sector in the Emirate by redirecting the amounts of the financial guarantees and security deposits, which are no more required, into the market instead of retaining them;
3.
mitigate the risks,
losses, or damage that may be caused by Construction Works by providing an
Insurance Policy that covers these risks, losses, and damage;
4.
provide a comprehensive
credit protection for the rights of all stakeholders of the Construction
sector, and boost their confidence that Construction
Works will be implemented in accordance with the plans and the technical and
engineering standards adopted in this respect; and
5.
enhance the global competitiveness
rank of the Emirate, particularly with respect to the quality.
a.
To obtain a Permit, a
Contractor must submit an Insurance Policy issued by an Insurance Company to indemnify
against the damage or loss that may result from the Construction Works to be implemented by the Contractor.
b.
Paragraph (a) of this
Article applies only to the Contractors appointed to implement
any of the following Construction Works:
1.
construction of buildings;
2.
alteration or addition
works that cover an area of three hundred square
metres (300 m2) or more;
3.
building demolition
works;
4.
shoring
works; and
5.
any other works
determined by the DM in coordination with the Competent Entity.
a.
An Insurance Policy
submitted by a Contractor to obtain a Permit must be valid:
1.
in case of building construction, alteration, or
addition works, from the date of
issuance of the Permit until the lapse of one (1) year from the issuance of a Certificate of
Completion by the Competent
Entity; or
2.
in case of building demolition works and shoring
works, from the date of
issuance of the Permit until the date of issuance of a Certificate
of Completion by the Competent Entity.
b.
The DM may, in
coordination with the Competent Entity, determine the validity period of the
Insurance Policy required
for any Construction Works determined in accordance with sub-paragraph (b)(5) of Article (4) of this
Resolution.
The Insurance Policy submitted by a Contractor for the purpose of
obtaining a Permit must provide comprehensive insurance coverage against the
risks and liabilities arising from the implementation of Construction Works. In
particular, it must provide coverage against the following:
1.
the risks, losses, and
material damage related to the Construction Works stated in paragraph (b) of
Article (4) of this Resolution; and
2.
civil liability towards
third parties.
The DM will, in coordination with the Competent Entity, the Insurance
Company, and the competent federal entities, prepare the standard template of
the Insurance Policy required for issuing the Permit. This template
must include the following:
1.
the mandatory scope of
insurance coverage;
2.
the basic details that
must be stated in the Insurance Policy;
3.
the types of risks,
losses, and material damage that must be covered by the Insurance Policy; and
4.
any other details
determined by the DM in coordination with the Competent Entity.
An Insurance Policy may not be cancelled or modified for any reason
whatsoever during its validity period without first obtaining the relevant
approval of the DM or the Competent Entity.
The DM or the Competent Entity may reject a Permit application if the relevant Insurance Policy does not meet the conditions and requirements prescribed in
this Resolution.
a.
The Insurance Policy prescribed under this Resolution
will substitute for any security deposits or financial guarantees required
to be collected from a Contractor by the Competent Entity for the purpose of
issuing a Permit.
b.
Any provision in any
other resolution is hereby repealed to the extent that it contradicts the
provisions of this Resolution.
The Director General of the DM will, in coordination with the Competent
Entities, issue the resolutions required for the implementation of the
provisions of this Resolution.
This Resolution will be published in the Official Gazette and will come
into force ninety (90) days after the date of its publication.
Hamdan bin Mohammed bin Rashid Al Maktoum
Crown Prince of Dubai
Chairman of the Executive Council
Issued in Dubai on 23 April 2022
Corresponding to 22 Ramadan 1443 A.H.
©2022 The Supreme
Legislation Committee in the Emirate of Dubai
[1]Every effort
has been made to produce an accurate and complete English version of this
legislation. However, for the purpose of its interpretation and application,
reference must be made to the original Arabic text. In case of conflict, the
Arabic text will prevail.