Workmen compensation insurance UAE is a policy that provides financial protection to employers.
It covers medical expenses, wage compensation, and disability or death benefits for employees injured or affected by work-related illnesses.
This article explains the legal requirements, employer obligations, and the role of insurance in compliance with UAE labor laws in 2025.
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Workmen Compensation Insurance UAE
Workmen compensation insurance is a commercial product that helps employers cover financial obligations related to work injuries and occupational diseases.
While UAE labor laws do not explicitly mandate this insurance, employers must compensate workers for work-related injuries.
Under Federal Decree-Law No. 33 of 2021, employers must provide medical care, cover wages during recovery, and compensate employees for permanent disability or death.
The compensation amount ranges from AED 18,000 to AED 200,000, based on the worker’s last drawn salary.
Workmen Compensation Insurance in Free Zones
In free zones, many authorities require companies to maintain workers’ compensation insurance as a licensing condition. For example:
- DMCC (Dubai Multi Commodities Centre) mandates employer’s liability insurance covering workplace injuries.
- JAFZA (Jebel Ali Free Zone) requires workmen compensation insurance for all employees.
- DAFZA (Dubai Airport Free Zone) has similar rules for businesses operating within its jurisdiction.
Employers operating in free zones must check their specific licensing authority’s requirements.
Workmen Compensation Insurance Under UAE Labor Law
Even if workmen compensation insurance is not explicitly mandated, employers must comply with Article 37 of the UAE labor law:
- Medical Expenses: Employers must cover all treatment costs until the employee recovers or is deemed disabled.
- Salary Protection: Full salary for six months, followed by half salary for up to another six months.
- Disability or Death Compensation: If an employee dies due to a work-related injury, their family receives compensation based on 24 months’ salary.
- Payment Deadline: Compensation must be paid within 10 days of the final medical report.
Free Zone vs. Mainland Workmen Compensation Rules
For mainland UAE companies, insurance is not explicitly required, but businesses must provide financial security, such as:
A bank guarantee of AED 3,000 per employee OR A government-approved insurance policy (Taa-meen).
However, most free zones mandate workmen’s compensation insurance as a licensing requirement. Failing to obtain insurance in these zones can result in fines or business license suspension.
UAE Workmen Compensation Insurance Benefits for Employers
Employers in the UAE face high liabilities if an employee suffers a work injury. Workmen compensation insurance UAE helps by:
- Covering medical expenses and wage replacement costs.
- Ensuring compliance with labor laws and free zone regulations.
- Protecting businesses from legal claims related to workplace injuries.
- Managing financial risks associated with work-related accidents.
Learn about Terminating employees on compensation in UAE.
Legal Services for Workmen’s Compensation in UAE
Our labor lawyer in Dubai provides specialized legal services to assist businesses in complying with UAE labor laws related to workmen’s compensation insurance.
Our services include:
- Legal Consultation: Advising employers on their obligations under UAE labor law and free zone workmen’s compensation insurance regulations.
- Policy Review and Compliance: Ensuring workmen compensation insurance policies meet legal requirements.
- Claims Assistance: Representing employers in work injury claims and disputes.
- Contract Drafting: Drafting employment contracts with proper work injury liability clauses.
- Regulatory Compliance: Helping businesses navigate federal and free zone workmen’s compensation insurance regulations to avoid penalties.
FAQs about Workmen Compensation Insurance in UAE
Conclusion.
While workmen compensation insurance is not explicitly required under federal UAE labor law, employers remain financially responsible for workplace injuries.
In mainland UAE, companies can choose between a bank guarantee or an insurance policy. In free zones, most authorities mandate workers’ compensation insurance.
To remain compliant and protect business operations, UAE employers should consult with free zone regulations and labor law requirements to determine the best approach for securing coverage.
Investing in insurance safeguards both employees and companies against unexpected financial burdens.
Contact our labor law firm in UAE for expert help. Click the Whatsapp icon below.
A legal consultant specializing in UAE labor law. He regularly publishes articles on the website and writes on various areas of UAE law, with a specific focus on labor law.
