Ruling on Commercial Insurance
If a businessman makes a deal with a foreign company for rice, sugar or tea, for example, the businessman takes out insurance on the property against shipwreck, fire and catastrophe, he pays the insurance at a rate of two per cent against the value of the property. Then when the property arrives, if any loss has occurred, he applies to the insurance companies and they reimburse him for the value of the loss. Even if the ship sinks, the insurance company will compensate him for the whole value of the property. What is the ruling?
If the matter is as mentioned, then that is the type of commercial insurance that is forbidden because of the excessive harm and the gambling it includes-and both of these are major sins. May peace and blessings be upon our Prophet, Muhammad and upon his family and companions.
The Permanent Committee