Federal Decree-Law No. (25) of 2025 promulgates a new UAE Civil Transactions Law, in force on 1 June 2026. It replaces the 1985 law in full. For insurers, MGAs, brokers, and corporate insureds in the UAE, the insurance chapter has been re-stated and several decades-old policy-wording habits no longer survive.
Here is the void-clause map every policy wording should be tested against before 1 June 2026.
The gating rule — Article 954
Article 954 is the non-derogation provision: any agreement contrary to the insurance chapter is void unless to the benefit of the insured or the beneficiary. This sets the policy-drafting frame. Every clause that touches forfeiture, exclusion, time-bar, or burden of proof must be tested for whether it depresses the insured's position below the statutory floor.
The five void clauses in Article 958
Article 958 lists five categories. Each one is independent — a policy can pass four tests and still fail the fifth.
1. Forfeiture for legal violations. Void unless the violation is an intentional crime. Standard "compliance with laws" forfeiture wording often bites on negligent or strict-liability breaches; that wider drafting is exposed.
2. Late-notice forfeiture. Void where the delay was for a valid excuse. Pure notice-or-bust drafting cannot defeat an excused-delay claim.
3. Hidden printed conditions. Any printed condition that is not prominently displayed and that creates nullity or forfeiture is void. The "fine print" doctrine is now express.
4. Arbitration clause embedded in general printed conditions. Void unless it is a special agreement separate from the general conditions. Policy issuance practice should treat arbitration as a standalone signed document — not a printed condition.
5. Other unfair conditions. Void where the breach has no causal connection to the occurrence of the insured event. This is the catch-all that gives the court a basis to strike unreasonable conditions on a causation test.
Concealment and misrepresentation — Article 962
The misrepresentation regime is calibrated at Article 962:
- Bad faith. Where the insured in bad faith conceals a matter or makes an incorrect statement that diminishes the materiality of the risk or changes its subject matter, or where they fraudulently breach undertakings — the insurer may demand termination and claim premiums due before that demand.
- No bad faith. The insurer may demand rescission but must return premiums covering periods of no risk.
Standard policy wordings frequently treat any misrepresentation as voidance. The non-derogation rule under Article 954 makes that drafting exposed. Calibration to the bad-faith / no-bad-faith split is the right anchor.
Subrogation — Article 960
The insurer is subrogated by operation of law on payment, up to the amount paid, against the person who caused the damage. The statutory carve-out preserves the position of:
- ascendants or descendants of the insured;
- the spouse;
- persons for whose acts the insured is legally responsible.
Subrogation rights against any of those persons require an intentional cause; subrogation rights cannot be conferred by contract where the law excludes them.
Real-right priorities on fire pay-outs — Article 975
Where the insured property is encumbered by a registered or notified mortgage, pledge, or other in-rem security, the rights attach to the fire-insurance proceeds and the insurer cannot pay the insured without their consent (Article 975). Where the property is attached or under sequestration, the insurer also cannot pay (Article 975(3)).
For commercial property and motor fleet covers, this should be reflected in the claims-handling protocol.
Life insurance — three provisions that change the picture
- Article 978. Third-party-life policies require dated written consent of the insured life before the contract. If the life insured lacks legal capacity, the legal representative consents.
- Article 980. Intentional causation by the insured (for own-life policies) or by the beneficiary forfeits cover.
- Article 985. Life-insurance proceeds do not form part of the insured's estate. This is a critical succession-planning fact and should be reflected in beneficiary-onboarding materials.
Takaful — Article 967
Article 967 expressly recognises takaful (cooperative) insurance: participants pool contributions into a takaful insurance fund; the fund's investment is permitted with profits distributed per the agreement. Each member is "insured on a takaful basis". This is the first time takaful gets a Civil Code home alongside the regulator's framework, and product documentation should align with it.
Limitation — Article 966
Claims under an insurance contract are time-barred three years from the event giving rise to the claim. The clock has three knowledge-based start triggers:
- Concealment of data — from insurer's knowledge.
- Insured event — from concerned parties' knowledge.
- Third-party recourse — from the third party's claim or recovery from the insured.
Articles 6–7 require unexpired periods under the 1985 law to be recalculated against this regime on 1 June 2026.
Related Civil Code 2025 guides
Published 18 May 2026. General information only — not legal advice. Contact us for matter-specific advice.