A road haulage company that wants to insure its lorries according to sharia can use general takaful where it is licensed, as in Malaysia or Pakistan. In Europe, with no operator identified, it must carefully examine a conventional heavy goods vehicle policy.
A heavy risk by nature
An articulated vehicle weighing several dozen tonnes causes far more serious damage than a car. Third-party liability, damage to the tractor unit and trailer, and the cargo carried form three separate blocks that a haulier must insure separately.
The tabarru' fund and costly claims
In takaful, each haulier pays a donation, the tabarru', into a common fund that settles members' claims. One serious lorry accident can drain this fund quickly, which is why the support mechanisms set out in international standards matter so much.
The operator's qard when the fund is in deficit
The IFSB-14 standard provides that an operator advances a qard hasan, an interest-free loan, to the participants' fund when claims exceed its resources. The loan is repaid only from later surpluses, spreading the loss over several financial years.
Retakaful: sharing large road risks
The high exposures of a lorry fleet are ceded through retakaful. Under the IFSB-18 principles of April 2016, operators contribute to a common fund managed by a retakaful operator, where risk is shared rather than transferred to a reinsurer.
Which management model suits a fleet
A haulier needs to know whether the operator applies wakala, mudaraba or the hybrid wakala-waqf model. In Pakistan, the SECP Takaful Rules 2005 already based products on these contracts, with the waqf fund having its own legal personality.
Europe without a general takaful operator
No takaful offer for heavy goods vehicles has been found in France, Belgium or Switzerland. At the IFM summit in London in 2014, Solvency II was named the biggest challenge for European takaful, and Swiss Re considered this market still embryonic.
Markets where licensed operators can be found
Hauliers working in South-East or South Asia find established frameworks: the IFSA 2013 in Malaysia, under Bank Negara Malaysia, or the Takaful Rules 2012 in Pakistan, which allowed takaful windows within conventional insurers.
Insuring lorries through a takaful window
A window housed within a conventional insurer may be suitable if the funds are genuinely separated. A 2008 article in Banque Stratégie described this option with a sharia board of at least three members and compliant funds kept apart from conventional business.
The goods carried are not the lorry
The vehicle policy does not automatically cover the goods loaded on board. The haulier's liability towards customers is handled separately, and the owner of the goods can take out their own policy; in takaful, each cover must stay limited to the actual loss.
Lorries financed through ijara
Many fleets are acquired by leasing, and ijara is the Islamic equivalent of a finance lease. The lessor, who owns the lorry, in principle bears the risk and often builds insurance into the rent or imposes it on the lessee; clarify this in writing.
Sharia supervision and annual audit
In Pakistan, every operator must have a Shariah Board of recognised scholars and undergo an annual sharia audit as well as a financial audit. A haulier can request these documents before signing, as proof that fund management follows the sharia board.
Takaful accounting under AAOIFI
Since 1 January 2025, the AAOIFI FAS 43 standard governs accounting for takaful, alongside FAS 42 for the presentation of financial statements. These standards make it possible to read the participants' fund and the operator's fund separately in the accounts.
Insurance process for a lorry fleet
- List the vehicles, their tonnage, domestic and international routes, and the type of goods usually carried.
- Identify general takaful operators licensed by the regulator of the country of registration, or note that no local offer exists.
- Ask for the names of the sharia board members, their opinion on the product and the latest sharia audit report.
- Ask how large claims are ceded through retakaful and whether an operator qard is planned in case of deficit.
- Compare the contribution, the wakala fee, the excess per claim and the surplus allocation key.
- Organise prompt accident reporting by drivers, with an accident report, photos and the consignment note.
Cost elements of takaful HGV cover
| Element | Function | Factors that change it |
|---|---|---|
| Tabarru' paid into the fund | Pays the fleet's claims | Tonnage, annual mileage, areas served, past claims |
| Wakala fee | Pays for management by the operator | Contractual rate, fleet size |
| Retakaful cost | Protects the fund against major accidents | Cover limits, available retakaful markets |
| Excess per claim | Share borne by the haulier | Chosen level, prevention policy |
| Possible surplus | Returned or offset against future contributions | Underwriting result, repayment of an outstanding qard |
File to provide when insuring lorries
- Company registration extract and haulage operator licence
- Registration certificates for tractor units and trailers
- List of drivers with licences and qualifications
- Claims record for recent years
- Ijara or murabaha contracts for financed vehicles
- Description of goods and routes
Costly mistakes for a haulier
- Assuming the lorry policy covers the cargo, when liability towards customers and goods on board falls under separate covers.
- Choosing an operator without identified retakaful: a single major accident can exhaust the fund and delay claim payments for a long time.
- Accepting a sharia-compliant label without an annual sharia audit or a sharia board named in the documents provided.
- Overlooking the surplus clause: while a qard is outstanding, any excess first repays the operator before anything is returned.
- Letting a lorry run without compulsory third-party liability while waiting for a hypothetical local takaful offer.
Questions from road hauliers
Can a French haulier buy foreign takaful for its lorries?
An insurer must in principle be authorised in the European Union to cover a risk located in France. No general takaful operator has been identified there, so a policy taken out in Malaysia or the Gulf would not replace compulsory French insurance.
Is retakaful itself sharia-compliant?
The IFSB-18 principles present it as the Islamic alternative to reinsurance, based on tabarru', ta'awun and the prohibition of riba. Risk is shared among participating operators, under the supervision of a sharia board, rather than sold to a reinsurer.
Why can a fleet's surplus be zero despite few accidents?
The surplus depends on the result of the whole fund, not just your fleet. If a qard remains to be repaid to the operator, or if other participants suffered heavy claims, the distributable excess can disappear entirely.
What should be checked in a conventional HGV policy?
Look for clauses on how funds are invested, interest charged on late or instalment premiums, and what happens to the underwriting surplus. A scholar or sharia board can then assess, case by case, the points that raise issues of riba or gharar.