Insuring receivables

A question from a trader offered insurance by a company on the debts other traders owe him in return for an annual percentage, in which Jordan's General Iftaa Department answered that insuring debts is unobjectionable if the insurance is cooperative and the debt arises from a lawful transaction, and not permitted if the insurance is commercial. ¹

A trader owed money by a number of other traders asked about a company's offer to insure these receivables, covering 90% of a debt's value if the traders do not pay, in return for an annual percentage he pays the company. ¹

The Department answered that the ruling on insuring debts depends on the type of insurance: if it is commercial, dealing in it is forbidden, because commercial insurance is forbidden in the view of the majority of jurists and the fiqh academies, as a contract built on gambling. ¹ It said that if the insurance is Islamic cooperative insurance, dealing in it is permitted, because it rests on mutual guarantee, cooperation and donation among the members of the fund, which is the view of most fiqh academies and contemporary fatwa bodies. ¹ It concluded that insuring debts is unobjectionable if the insurance is cooperative, since the risk of late payment or non-payment is one that may be insured against, provided the debt arises from a lawful transaction, and that it is not permitted if the insurance is commercial. ¹

Jordan's General Iftaa Department published this fatwa on aliftaa.jo as no. 4028, dated 11 December 2025. ¹ The museum records this text as a historical document attributed to the body or scholar that issued it; it issues no ruling of its own.