Additional terms of construction insurance in accordance with Vietnamese law
For works valued at less than VND 1,000 billion, the minimum insurance amount for property damage and related legal costs (if any) is 10% of the value of the work for the entire insurance period. and an unlimited number of losses. Those are the things related to the issue of building insurance. To learn more about this, today, LSX Lawfirm will give you an article about “Additional terms of construction insurance in accordance with Vietnamese law”, as follows:
Construction insurance
Construction insurance was born to limit the risks that may occur during the construction process. So from the perspective of investors, contractors or employees, this is a very necessary and practical type of insurance.
Based on the provisions of the Law on Construction, construction insurance is a type of risk insurance that applies to construction works.
This type of insurance is intended to ensure that your interests are compensated if there is an unfortunate physical loss to that work. Or indemnify a third party when the insured event occurs in the contractual agreement signed with the public insurance seller.
Current law has regulations that the responsibility to buy construction insurance is mandatory for some works and the cost norms are fixed. This is to ensure liability for material compensation, and compensation for 3rd parties when an incident is recorded as agreed in the construction insurance contract form.
This insurance is also one of the mandatory procedures that investors need to meet in order to be granted a construction permit.
Additional terms of construction insurance
The Government has just issued Decree 20/2022/ND-CP amending and supplementing a number of articles of the Government’s Decree No. 119/2015/ND-CP dated November 13, 2015, stipulating compulsory insurance in business activities. construction investment.
Specifically, on subjects who must buy compulsory insurance in construction investment activities, the Decree amends and supplements Clause 3, Article 4 as follows: Construction contractors must purchase compulsory insurance for their employees. construction on-site and compulsory insurance of civil liability (TNDS) for third parties.
The cost of purchasing compulsory civil liability insurance for a third party is similar to the cost of compulsory insurance for construction workers on the construction site and is suitable for the subject that must buy insurance as a construction contractor. submit. Therefore, the Decree amends and supplements the provisions at point c, clause 4, Article 3 as follows: For compulsory insurance for construction workers on the construction site, compulsory insurance of civil liability for third parties: Fees Insurance is included in the cost of production and business.
At the same time, the additional Decree stipulates that the period of compulsory civil liability insurance for third parties is a specific period from the start date to the end date of the construction period based on the construction contract and stated in the insurance contract.
The Decree also adds Point d, Clause 1, Article 6 on insurance coverage, excluding liability insurance. Accordingly, for compulsory civil liability insurance for third parties: The insurance enterprise shall be responsible for indemnifying the construction contractor for amounts that, according to the law, the construction contractor has liability to compensate a third party for non-contractual damages to health, life, property directly incurred during the construction process and relevant legal costs (if any) within the scope of the contract. insurance liability as agreed in the insurance contract.
Specify the minimum insurance amount
Decree 20/2022/ND-CP supplements Clause 4, Article 10 on the minimum amount of civil liability insurance for third parties as follows:
a- The minimum insurance amount for damage to health and life is VND 100 million for one person in one case and there is no limit to the number of loss cases.
b- The minimum insurance amount for property damage and related legal expenses (if any) is determined as follows:
– Firstly, For works valued at less than VND 1,000 billion, the minimum insurance amount for property damage and related legal costs (if any) is 10% of the value of the work for the entire warranty period. and there is no limit to the number of losses.
– Secondly, For works valued at VND 1,000 billion or more, the minimum insurance amount for property damage and related legal costs (if any) is VND 100 billion for the entire insurance period. and unlimited number of losses.
This Decree takes effect from July 1, 2022..
Who must buy construction insurance?
Accordingly to the content of Circular 329/2016/TT-BTC, the investor is obligated to buy construction insurance in case this premium has been included in the price of the work in the contract, specifically for construction contractors. submitted below: – Firstly, Construction works that affect the safety of the community.
– Secondly, Construction works that have great impacts on the environment are subject to the need to assess their impacts on the environment.
– Thirdly, Construction works with complicated construction conditions and specific technical requirements.
In addition, based on Clause 2, Article 9 of the Law on Construction 2014, the obligation to purchase construction insurance for each specific unit is as follows:
– with the type of work that affects the safety of the community, affects the environment. And for works with construction conditions that assessed as complex and require specific techniques, the investor must purchase construction insurance during the construction period.
– For works of grade II or higher, the construction consultancy and design contractor need to purchase investment consultancy professional liability insurance. The construction contractor is responsible for purchasing a full range of insurance for construction workers on the construction site for their employees.
– For parties involved in the construction of works. The State also encourages the purchase of insurance in the above mentioned construction investment activities. Except for other cases specified in Clause 2 of Article 9 of the Law on Construction 2014.
How long is construction insurance?
– For construction works valued at less than 700 billion VND (which does not include installation or construction work, however, the cost for that part of work must be less than 50% of the total value of the work items). builder):
The insurance period will calculate from the date of commencement; of construction to the end on the basis of the written approval of the competent authorities; for the investment decision (including adjustments and supplements, if any).
From the time when parts and items of the works handed over; or put into use, the respective insurance period will also end.
– For construction works valued at less than 700 billion VND, including the installation work; with the cost of implementation accounting for 50% or more of the total value of construction work items:
The insurance period will calculate; from the date of commencement of construction work; based on the documents of the competent authorities approving the investment decision; (full adjustment and supplementation if any), until the discussion carried out. deliver the work; or after the first load test completed.
This timeline will depend on which comes first; but will not exceed 28 days from the start of the test run. And from the time when the construction equipment starts to test, the corresponding insurance period will also end.
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Above is LSX Lawfirm’s advice on the content of the problem “Additional terms of construction insurance in accordance with Vietnamese law”. And all the above knowledge to use in work and life. If you have any questions and need more advice and help, please contact the hotline for the reception. Lawyer X is a place that provides reputable and fast business services at reasonable prices. Customers will be extremely satisfied when using our services.
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Related questions
– Firstly, Construction warranty insurance.
– Secondly, Construction insurance during construction.
– Thirdly, Insurance for construction supplies, materials, vehicles, and equipment.
– Third-party civil liability insurance.
– Finally, Professional liability insurance for construction investment consulting.
Accordingly to Point e, Clause 2, Article 5 of Decree No. 10/2021/ND-CP and Clause 1, Article 4 of Decree No. 119/2015/ND-CP, the purchase of construction insurance during the construction period shall be performed by the investor. , in case the insurance premium for construction works is included in the contract price with the construction contractor, the purchase of construction insurance shall be carried out by the contractor in accordance with the signed contract and the provisions of the contract. relevant laws.
The main insurance products in the field of construction and installation include:
1. Professional liability insurance for consultancy, design, and construction investment then.
2. Insurance for all construction risks (contractors’ all risks (CAR) policy)
3. Insurance for all risks during installation (Erection all risks (EAR) policy) then.
4. Employer’s liability insurance, third-party liability insurance
5. Insurance for damage to machinery, existing property during construction, and construction site equipment then.
6. Warranty insurance
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