What is the ruling on commercial insurance?
Short answer
The cited ruling, reporting the decision of the Council of Senior Scholars, states that commercial insurance is prohibited because it contains excessive uncertainty and riba, while distinguishing it from genuine cooperative or charitable arrangements.
Evidence and explanation
The source reports the Council of Senior Scholars’ decision and gives the presence of gharar and riba as central reasons for prohibiting commercial insurance.
Scholar referenced
This editorial summary is based on the original source linked below and is not presented as a verbatim quotation from the scholar.
From the text of the answer (Arabic, with an English translation)
Original answer — Shaykh ‘Abd al-‘Aziz ibn Baz
حكم التأمين التجاري — فتوى ١٧٢٤- Question
«وسائل يسأل فيقول: أنا تاجر، وعندي مستودعات، وأستورد بضاعتي من الخارج بطريقة الحساب المفتوح، أي بدون اعتمادات، وطبعًا بمبالغ كبيرة، وبما أن هذه المبالغ على ذمتي للناس الذين يرسلونها لي، وأرغب في التأمين على تلك المستودعات؛ حفاظًا عليها من الأحداث، مثل الحريق، وخلافه، فهل لفضيتلكم إعطائي فتوى من الناحية الشرعية؟ هل التأمين عليها»
English translation (unreviewed): A questioner asks: I am a merchant and I have warehouses, and I import my goods from abroad by open account, that is without letters of credit, and of course in large sums; since these sums are owed by me to the people who send them to me, and I wish to insure these warehouses to protect them against events such as fire and the like, could your eminence give me a ruling from the Shari'ah point of view: is insuring them ...
(excerpt from the question)
- From the text of the answer
«قد درس مجلس هيئة كبار العلماء موضوع التأمين منذ سنتين تقريبًا، وقرر: أن التأمين التجاري محرم لما يشتمل عليه من الغرر، والربا، فالتأمين على المستودعات، أو على النفس، أو على سيارة، أو على أي شيء، هذا التأمين التجاري الصحيح فيه أنه محرم، وإن أفتى بعض الناس بحله، لكن لا وجه لذلك، فإنه عملية مشتملة على الغرر، والربا؛ فلا يجوز.»
English translation (unreviewed): The Council of Senior Scholars studied the subject of insurance about two years ago and decided that commercial insurance is forbidden because of the gharar and riba it contains. So insuring warehouses, or a person, or a car, or anything: this commercial insurance is, correctly, forbidden, even though some people have issued a fatwa that it is permissible; but there is no basis for that, because it is a transaction that includes gharar and riba, so it is not permissible.
The Arabic excerpts matched the original page word for word by an automated check and have not had human scholarly review. The English translations are unreviewed translations made for this site; they are not an approved Shari‘ah translation. Rely on the Arabic original.
Source
Ruling on commercial insurance
Shaykh ‘Abd al-‘Aziz ibn Baz, may Allah have mercy on him