Motor insurance disputes are the largest category of insurance disputes by volume in Bahrain. Common issues include responsibility for an accident, repair costs, depreciation, total-loss valuation, bodily injury compensation, claims procedures and settlement delays. Higher-value or more complex disputes also arise under property, engineering, construction, marine, cargo, medical and professional liability policies.
Disputes may turn on the policy’s wording and structure, including the relationship between the schedule, endorsements and general conditions, or differences between Arabic and English versions. Articles 696, 697 and 698 of the Bahrain Civil Code are relevant to the presentation and effect of certain policy conditions, late-notification provisions and exclusions.
Bahrain’s insurance disputes may proceed through claims handling, the CBB complaints process, the Bahraini courts or arbitration, depending on the policy and dispute. Cross-border matters may raise separate questions about jurisdiction and governing law. The market is also encountering more specialised issues involving professional indemnity, cyber risks, technology failures, war and political violence.
Compulsory third-party motor insurance contributes to the high volume of motor disputes. These commonly concern accident responsibility, repairs and repair methods, depreciation, total-loss valuations, bodily injury compensation, compliance with claims procedures and delays in settlement.
By value and complexity, significant disputes also arise under property, fire, engineering, construction, marine, cargo, medical and professional liability policies. They may involve causation, exclusions, disclosure, loss valuation, policy limits, or findings made by loss adjusters and technical experts.
The market is also encountering more specialised issues involving professional indemnity, cyber risks, technology failures, war and political violence. These claims may be fewer in number but may involve higher values, more complex policy wording, cross-border issues or reinsurance.
Disputes may arise from the wording of a policy and how it is drafted, structured and presented. Potential issues include international standard wording that has not been sufficiently adapted to Bahraini law, inconsistent schedules and endorsements, differences between Arabic and English versions, and uncertainty about the hierarchy among policy documents.
Article 696 of the Bahrain Civil Code provides that conditions concerning invalidity, forfeiture of an insured’s rights or arbitration may not be invoked against the insured unless prominently highlighted, such as through block lettering or larger print. Articles 697 and 698 provide further protection in relation to certain late-notification provisions and arbitrary or insufficiently specific exclusions.
Recurring areas of dispute include exclusions, notification requirements, non-disclosure or misrepresentation, warranties, conditions precedent, deductibles, policy limits, aggregation, causation wording, claims-made provisions and arbitration clauses.
Insurers commonly assess claims through internal claims teams, loss adjusters or external technical experts before deciding whether to reject, settle or partially admit a claim. Where exposure can be reasonably quantified, early commercial settlement may help control defence costs and avoid uncertainty associated with court-appointed expert evidence. Formal proceedings are more likely when the parties disagree about coverage, an exclusion, causation, non-disclosure or competing valuations. Early settlement may be less suitable where the dispute raises an issue affecting a wider portfolio of policies.
Insurance and reinsurance contracts are subject to Bahrain’s general conflict-of-laws framework under Law No. 6 of 2015 on Conflict of Laws in Civil and Commercial Matters with a Foreign Element. The parties may generally choose the applicable law, including international trade law and commercial customs. In the absence of an effective choice, the law of the parties’ common habitual residence may apply or, if there is no common habitual residence, the law of the place where the contract was concluded, unless the circumstances indicate otherwise. Different laws may be chosen for severable parts of a contract.
The parties’ choice remains subject to Bahraini public policy and overriding mandatory provisions. A choice of law in a consumer insurance contract may not remove mandatory protection available under the law of the consumer’s habitual residence.
Jurisdiction clauses are assessed under the general principles of Bahrain’s Civil and Commercial Procedures Law. A contractual forum clause cannot create jurisdiction where the court lacks competence or displace exclusive or mandatory jurisdiction prescribed by law. Foreign-court clauses are uncommon in ordinary domestic policies, but may appear in reinsurance, marine, aviation and other substantial commercial risks.
In cross-border disputes, jurisdiction and governing law are determined under separate legal frameworks. Where foreign law applies, the parties must establish its relevant provisions; if they do not, the Bahraini court may apply Bahraini law. Practical issues may include inconsistent clauses, service outside Bahrain, parallel proceedings, translation and legalisation, and differences between the law governing the underlying liability and the insurance contract. In tort claims, a direct claim against the insurer may be available where the law governing the insurance contract permits it.
Bahraini law does not generally use anti-suit injunctions as the ordinary method of enforcing an exclusive jurisdiction clause. A party would normally raise a jurisdictional objection before the court where proceedings were filed. Where a dispute is subject to an arbitration agreement, Article 8 of the UNCITRAL Model Law requires a court, upon a timely request, to refer the parties to arbitration unless the agreement is null and void, inoperative or incapable of being performed.
Arbitration clauses in insurance and reinsurance contracts are generally recognised in Bahrain. Law No. 9 of 2015 adopted the UNCITRAL Model Law on International Commercial Arbitration, including its 2006 amendments. However, Article 696 of the Civil Code applies an additional formality to insurance policies: an arbitration condition may not be invoked against the insured unless it is prominently highlighted.
A clearly drafted commercial or reinsurance arbitration clause should identify the seat, rules, number and appointment of arbitrators, language, governing law and scope of disputes covered.
Bahrain is a party to the New York Convention. Under Article 35 of the Model Law, an arbitral award may be recognised and enforced by written application to the competent Bahraini court. An Arabic translation may be required if the award is not in an official language of Bahrain. Article 36 provides limited grounds on which recognition or enforcement may be refused. The enforcement court does not rehear the merits.
Arbitration is not the usual route for high-volume retail or motor insurance disputes. It is more common in reinsurance and high-value or specialised property, engineering, construction, marine, energy and professional liability risks. Parties should address confidentiality expressly where they require it; confidentiality should not be assumed to arise comprehensively from the Model Law alone. An award is not subject to an ordinary court appeal on the facts or law, though an application to set it aside is available on limited grounds under Article 34.
A coverage dispute may concern whether an event falls within the insuring clause or whether an exclusion or forfeiture condition removes an otherwise existing entitlement. That distinction may matter under Article 696, which addresses the prominence of certain conditions. The analysis may involve the insuring clause, definitions, conditions, exclusions, endorsements and the legal effect of each provision.
Bahraini courts apply general Civil Code principles of contractual interpretation. If wording is clear, the court should not depart from it to identify a different intention. Where interpretation is required, the court considers the parties’ common intention, the nature of the transaction, commercial practice and the standards of loyalty and confidence applicable to the relationship.
Article 126 provides that, in cases of doubt, a term is interpreted in favour of the party prejudiced by its application and, in particular, in favour of the debtor where the term creates or increases an obligation. Where an insurance policy is a contract of adhesion, Article 59 requires ambiguity to be interpreted in favour of the adhering party, ordinarily the insured. Exclusions must be sufficiently clear to identify the risks removed from cover. Endorsements generally prevail over inconsistent standard conditions where the hierarchy is clear.
Cyber-related coverage litigation remains relatively limited in Bahrain. Potential disputes include physical damage, business interruption requirements, social-engineering fraud, data restoration costs, cloud-service outages and aggregation where one vulnerability affects multiple systems or insured entities. Policy drafting is responding with more detailed cyber definitions, sublimits, waiting periods, vendor conditions, ransomware provisions and exclusions addressing state-backed or war-related cyber operations.
Aggregation disputes may concern whether losses constitute one or several occurrences, whether they arise from a single originating cause, and whether separate limits, deductibles or sublimits apply. Insurers and insureds may rely on competing expert reports; neither party’s private report is necessarily determinative.
Article 712 of the Civil Code requires an insurer, once the insured risk has materialised, to pay the amount due within 30 days after the entitled person submits the details and documents necessary to establish the right to payment. The source chapter notes that this article does not provide liability for the insured if payment is not made within that 30-day period.
The CBB Rulebook requires insurers to respond promptly, explain claims processing, identify actions required from customers and handle claims fairly. Under the CBB complaints procedure, a non-life insurer’s complaints team should acknowledge a complaint on the same day and provide a written response within one week; longer periods apply to life insurance complaints.
Sanctions and payment restrictions affect cross-border claims. CBB-regulated insurers must maintain financial crime controls and consider relevant sanctions, embargoes and blacklists in relation to the claimant, beneficiary, recipient, intermediary and financial institutions involved.
Delegation is regulated but not absolutely prohibited. The chapter states that outsourcing core insurance business activities and client-facing activities is not permitted. Licensed insurance managers may provide services including underwriting and claims processing, and outsourcing arrangements are permitted subject to regulatory controls. The insurer’s board and management remain ultimately responsible for the systems, controls and performance of outsourced activities.
Motor accident and bodily injury claims are the largest category of claims against insureds by number. More substantial defence-cost exposure tends to arise under general liability, construction, engineering, medical malpractice, professional indemnity, D&O and other financial lines policies.
Where a policy covers defence costs and the claim potentially falls within insured liability, the insurer may fund or control the defence, appoint counsel, approve counsel chosen by the insured, or reserve its rights while investigating coverage. The policy determines whether defence costs are inside or outside the indemnity limit and whether the insurer’s prior consent is required.
Defence costs may rise where claims involve multiple insureds, contractors, consultants, insurers or jurisdictions. Technical issues may be referred to party-appointed experts, but the parties may still incur costs preparing submissions, challenging assumptions and responding to reports. Defence costs in Bahrain remain comparatively lower than in some jurisdictions, including the United Kingdom and United States, but are increasing as risks and disputes become more specialised and cross-border.
Standalone legal expenses insurance, after-the-event products and third-party litigation funding are not widely used in Bahrain. Parties generally fund proceedings themselves, rely on insurance or seek recovery of the costs permitted by the court.
A third party who is not a party to an insurance contract does not automatically have a right to sue the insurer. A direct claim requires a statutory or contractual basis. The principal exception identified in the chapter is compulsory third-party motor insurance, which permits a person suffering bodily injury or property damage from a motor accident to pursue the insurer of the party responsible.
Where an insurer compensates an injured third party and later seeks recourse against its insured, the insurer must establish the relevant breach, the amount actually paid and the legal connection between that payment and the recovery sought. Courts generally require clear evidence of compensation paid. The chapter notes the importance of complete payment records, releases, documentation of settlement and timely notice to the insured of any reservation of rights.
Regional hostilities and disruptions in 2026 have brought war, political violence and supply-chain risks into immediate underwriting focus. Marine, cargo, aviation, property, business interruption and travel exposures have been particularly affected. Demand for war-risk and political violence cover has increased, along with scrutiny of exclusions and territorial definitions. Many claims remain under adjustment or require further loss quantification.
Potential disputes may concern the meaning of “war”, “hostilities”, “terrorism” and “political violence”; causation; territorial scope; aggregation; waiting periods; sublimits; notification requirements; and reinsurance provisions. Geopolitical disruption may generate claims under existing property, marine, cargo, business interruption, trade credit, travel and event cancellation policies.
The source chapter identifies geopolitical and war-related exposure, cyber and data risks, technology dependency, operational resilience and the gradual adoption of AI as significant emerging risks. It notes that ESG-related coverage litigation, data-centre claims, social-media addiction claims and next-generation nuclear insurance litigation have not developed into distinct or material categories in Bahrain.
The Bahrain Personal Data Protection Law, Law No. 30 of 2018, affects insurers’ collection, use, retention and disclosure of personal data. Health information is sensitive personal data. Insurers must process data fairly, for a specific legitimate purpose and only to the relevant and non-excessive extent. Sensitive data ordinarily requires consent, with exceptions that include processing necessary to pursue or defend legal claims and specified healthcare circumstances.
The chapter reports no developed body of Bahraini court decisions specifically addressing AI-related jurisdiction or choice of law. It also states that AI-generated or AI-assisted claims have not yet caused a material increase in claim volumes, while noting that AI tools may produce inaccurate legal references, inconsistent accounts or overstated calculations. The chapter recommends verifying the underlying evidence and preserving claim records and audit trails.
The issues identified in the chapter make policy wording, claims records and dispute-resolution provisions central to insurance dispute management. Insurers and insureds may need to consider:
Motor insurance disputes are the largest category by volume. The chapter attributes this principally to compulsory third-party motor liability insurance and the continuing flow of motor accident claims.
Common issues include responsibility for the accident, repair costs and methods, depreciation, total-loss valuation, bodily injury compensation, compliance with claims procedures and settlement delays.
The chapter identifies disputes under property, fire, engineering, construction, marine, cargo, medical and professional liability policies as significant by value or complexity. They may involve causation, exclusions, disclosure, loss valuation, policy limits and expert findings.
Disputes may arise from unclear or inconsistent wording, insufficient adaptation of international standard terms to Bahraini law, conflicts between schedules and endorsements, differences between Arabic and English versions, or uncertainty over which policy document takes precedence.
The chapter states that conditions concerning invalidity, forfeiture of the insured’s rights or arbitration may not be invoked against the insured unless prominently highlighted, for example through block lettering or larger print.
The chapter describes them as providing further protection in relation to certain late-notification provisions and arbitrary or insufficiently specific exclusions. It also states that Article 698 treats a general clause excluding activities contrary to laws and regulations as invalid unless the excluded activity is specifically identified.
Insurers commonly use an internal claims team, a loss adjuster or an external technical expert before deciding whether to reject, settle or partially admit a claim.
Where exposure can be reasonably quantified, early commercial settlement may help control defence costs, establish a definite reserve and avoid uncertainty associated with court-appointed expert evidence. An insured may also favour settlement where coverage is clear but the dispute concerns the amount of loss.
Formal proceedings are more likely where the parties disagree about a fundamental coverage issue, the validity of an exclusion, causation, non-disclosure or a substantial difference between competing valuations.
The chapter says the parties may generally choose the applicable law under Law No. 6 of 2015, subject to Bahraini public policy and overriding mandatory provisions. In the absence of an effective choice, the law of the parties’ common habitual residence or the place where the contract was concluded may apply, subject to the circumstances described in the law.
Yes. The chapter states that parties may choose different laws for severable parts of the same contract.
Not if it would deprive the consumer of mandatory protection available under the law of the consumer’s habitual residence, according to the chapter.
No. The court first considers whether Bahraini jurisdiction exists under the statutory rules. A contractual forum clause cannot confer jurisdiction where the court lacks competence or displace exclusive or mandatory jurisdiction prescribed by law.
Jurisdiction is determined under Bahrain’s Civil and Commercial Procedures Law, while the applicable substantive law is principally determined under Law No. 6 of 2015. If foreign law applies, the parties must establish its relevant provisions; otherwise, the court may apply Bahraini law.
The chapter states that a third party does not automatically have the right to sue an insurer. A direct claim requires a statutory or contractual basis. The principal exception identified is compulsory third-party motor insurance. A direct claim in a tort matter may also be available where the governing law of the insurance contract permits it.
Generally, yes. However, the chapter states that an arbitration condition in an insurance policy may not be invoked against the insured unless prominently highlighted as required by Article 696 of the Civil Code.
The chapter recommends that it identify the seat, applicable rules, number and method of appointment of arbitrators, language, governing law and the scope of disputes referred to arbitration.
The chapter states that an award may be recognised and enforced by written application to the competent Bahraini court under Article 35 of the UNCITRAL Model Law. An Arabic translation may be required if the award is not in an official language of Bahrain.
No. The chapter states that the enforcement court does not conduct a rehearing on the merits. Recognition or enforcement may be refused only on the limited grounds in Article 36 of the Model Law.
No. The chapter says arbitration is not the usual mechanism for high-volume retail or motor insurance disputes, which are generally handled through the CBB complaints framework or the Bahraini courts.
It is more common in reinsurance disputes and high-value or specialised policies, including major property, engineering, construction, marine, energy and professional liability risks.
The chapter cautions that confidentiality should not be assumed to arise comprehensively from the Model Law alone. It recommends that parties address confidentiality of pleadings, evidence, hearings, awards and information disclosed during enforcement or annulment proceedings.
The chapter states that Article 712 requires payment within 30 days after the entitled person submits the details and documents necessary to establish the right to payment. It also notes that this article does not provide liability for the insured if payment is not made within those 30 days.
According to the chapter, the complaints team should acknowledge a non-life insurance complaint on the same day and provide a written response within one week. Longer periods apply to life insurance complaints.
The chapter states that the insurer’s board and management remain ultimately responsible for the adequacy of systems, controls and performance of outsourced activities. Outsourcing arrangements are subject to regulatory controls.
Depending on the policy, the insurer may fund or control the defence where defence costs are covered and the claim potentially falls within insured liability. The policy determines whether defence costs are inside or outside the indemnity limit and whether prior consent is required.
No. The chapter describes third-party litigation funding as uncommon and says parties generally fund proceedings themselves, rely on insurance or seek recovery of costs permitted by the court.
The chapter describes this as a recurring issue. The insurer must establish the relevant breach, the amount actually paid and the legal connection between the payment and the recovery sought. Courts generally require clear evidence of the compensation paid.
The chapter says AI and technology have not yet produced a material volume of reported Bahraini insurance litigation, although they are beginning to affect risk assessment and potential liability. It also reports that AI-assisted claims have not yet caused a material increase in claim volumes.
The chapter identifies possible claims concerning data breaches, automated decisions, cyber-security failures, defective software, inaccurate digital advice and dependence on external technology providers. A single loss may involve several potentially responsible parties.
The chapter says ESG considerations have not yet generated a significant or distinct category of insurance coverage litigation. They may nevertheless affect underwriting, pricing, deductibles, risk-improvement conditions or the availability of cover.
The chapter states that Law No. 30 of 2018 affects how insurers collect, use, retain and disclose personal data. Health information is sensitive personal data. Insurers must process data fairly, for a specific legitimate purpose and only to the relevant and non-excessive extent.
The chapter says 2026 regional hostilities and disruptions have brought war, political violence and supply-chain risks into immediate underwriting focus. Potential exposures include marine, cargo, aviation, property, business interruption and travel.
Potential disputes include the meaning of “war”, “hostilities”, “terrorism” and “political violence”; causation; territorial scope; application to undeclared conflict; aggregation; and whether state-linked cyber operations fall within a war or cyber-war exclusion.
The chapter says it is not aware of a developed body of Bahraini insurance litigation concerning data-centre losses or reported proceedings specifically involving social-media addiction coverage. It also states that next-generation nuclear technologies have not produced a material insurance market or litigation trend in Bahrain.
As at August 2026, the chapter states that no specific publicly confirmed legislative reform was directed exclusively at war-risk exclusions or the judicial treatment of claims arising from recent regional hostilities. It notes that existing policy wording and regulatory guidance may be tested by resulting claims and decisions.
To read the full article, please view the Bahrain chapter contributed by Hassan Radhi & Associates to Insurance Litigation 2026: Global Practice Guides. Read the Chambers Bahrain Chapter.
Hassan Radhi & Associates is one of Bahrain's leading full-service law firms and the exclusive Lex Mundi member firm in Bahrain. Established in 1974, the Firm advises local, regional and international clients across corporate and commercial law, banking and finance, dispute resolution, arbitration, construction, employment, real estate, regulatory matters and other areas of Bahraini law.
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