Is Legally Required Business Insurance Permissible?

Question

Is opening a business with legally required insurance permissible when no halal alternative exists?

Answer

I pray you are well.

Yes, it is permissible. The main thing you are doing is opening a business. You are not doing this in order to take out insurance as the primary objective. Instead, insurance is a secondary matter in this case.

The Primary Purpose: Earning a Halal Income

A person opens a business to earn halal income, such as by selling sweets.

This is unlike someone who takes out life insurance simply because they are worried about the future.

Indemnity and Public Liability

Part of what makes certain forms of insurance allowed in some situations is the consideration of indemnity.

Indemnity is when someone comes to your property and, either through no fault of your own or through some lapse on your part, they get harmed or hurt on your property.

Similarly, if you host a public event, you may need public liability insurance to cover indemnity.

A Secondary Requirement in Running a Business

If that is the case, then it is permissible, because insurance is not the primary factor. It is a secondary factor in running your business.

Otherwise, it would be practically impossible for anyone to have a business in most countries.

For that reason, you should go with what is required. You do not need to take extras, and you should pray that you never have to use it.

And Allah knows best.
[Shaykh] Abdul-Rahim

Shaykh Abdul-Rahim Reasat began studying Arabic Grammar and Morphology whilst studying for a degree in English and History. After graduating, He traveled to Damascus and studied Arabic, Hanafi Fiqh, Usul al-Fiqh, Theology, and Logic with Shaykh Adnan Darwish, Shaykh ‘Abd al-Rahman Arjan al-Binsawi, Shaykh Husayn Darwish, Shaykh Muhammad Darwish, the late Shaykh Rashad Shams, and others. He then moved to Amman to continue his studies in those fields, as well as in Tafsir, Quranic Sciences, Hadith Methodology and Commentary, Prophetic Biography, Prophetic Perfections and Traits, Rhetoric, Arabic Literature, and Tajwid. His teachers include Shaykh Ali Hani, Dr. Hamza al-Bakri, Dr. Salah Abu al-Hajj, Dr. Mansur Abu Zina, Shaykh Ahmad Hasanat, Shaykh Ahmad Jammal, and others.