Fatwa: # 45732
Category: Jurisprudence and Rulings...
Country:
Date: 16th August 2020

Title

Qordata Company

Question

Qordata is a Shariah Compliant company engaged in selling of I.T Products and Technical Services. We have our offices located in United States and Pakistan. Business income is derived by selling software products and consulting services to customers who are based in United States. We opt to be Shariah Compliant in 2015 due to which we foregone USD 2M annual income which we were making by providing services to Financial Sector. This revenue comprised of almost of half of our revenue. Currently, majority of the customers in United States want Business Insurance Covers of different types such as Cyber Security Insurance, Professional Liability Insurance, Data Security Insurance etc. from Qordata for which they demand Insurance Covers amount from 1M USD to 20M USD which is a business norm in United States.

Since, Qordata is a Shariah Compliant company we had reached out to maximum Insurance Providers in United States to provide us Islamic Takaful Insurance Coverage but there is no such Insurance Company in United States which provide Islamic Takaful Insurance Coverage. Due to this significant hardship, we have loss various clients and revenue contracts which translated into huge financial loss for the company. Recently we loss a contract with client worth of USD 30,000 and currently a contract worth USD 200,000 is at stake due to this issue. We can foresee that majority of potential and existing clients will demand us to provide insurance coverages in near future.

We had also tried to reach Takaful Providers all across the world (UK, Malaysia, Brunei, Qatar etc.) but they had denied our request because we do not possess a registered office and operations in their respective countries.

Out of various insurance covers required, we managed to secure one Takaful Coverage from Takaful Pakistan Limited of amount 1M USD. This Takaful coverage costed us USD 15,000 plus USD 2,000 in tax in Pakistan and this same conventional insurance coverage would have costed us USD 200 to 300 per year in United States. Secondly, even if we are able to claim this Takaful amount from Takaful Pakistan Limited we would have to receive this payment first in Pakistan and then sent to United States for which we would have to pay approximately 30% of the claimed amount as Tax to State Bank of Pakistan which is a huge financial loss for our company. This may even cause to cease our operations due to Cashflow crunch. In short, this option is not financially viable for our company and it can cause bankruptcy to our company.

In a nutshell, avoiding Business Insurance Coverages due to unavailability of Islamic Takaful Insurance Coverages in United States are causing significant hardships in continuity of our business. In this situation,

1. Can we opt for Business Insurance Coverages available under the conventional scheme within the United States?

2. Any other altervative approach/suggestion considering the matter above?

Answer

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

We do not know the details of the product and how the insurance system operates in the context of your business. In order for us to advise you, you may explain the context of insurance in your business. Will it be possible for the client to take out insurance and you offer a discount to them to facilitate that? You may respond to admin@daruliftaa.net, reference Faizal.

 

And Allah Ta’āla Knows Best

Faizal

Student - Darul Iftaa

UK

 

Checked and Approved by,

Mufti Ebrahim Desai.

 

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