What are the cases of insurance exclusions for construction works in progress in Vietnam according to Decree 67/2023/ND-CP?
- What are the cases of insurance exclusions for construction works in progress in Vietnam according to Decree 67/2023/ND-CP?
- What is the insurance period of a compulsory insurance for construction works in progress in Vietnam?
- What is the responsibility of investors to purchase insurance for construction works in progress in Vietnam?
What are the cases of insurance exclusions for construction works in progress in Vietnam according to Decree 67/2023/ND-CP?
Pursuant to the provisions of Clause 2, Article 34 of Decree 67/2023/ND-CP stipulating cases of insurance exclusions during the construction period.
Insurers shall provide indemnities for damage to construction works in progress arising from all risks, except for insurance exclusions as follows:
- Losses incurred by war, riots, strikes, actions of hostile forces, rebellions, malicious acts on behalf of or in connection with political organizations, distraint, expropriation, requisition, confiscation or destruction or damage caused by order of competent regulatory agencies.
- Losses incurred by terrorism.
- Losses incurred by nuclear reactions, nuclear radiation, and radioactive contamination.
- Losses or damages of policyholders and the insured named in the list of entities placed under embargo.
- Losses or damages relating to diseases according to publications of competent authorities.
- Losses incurred by intentional violations against law of policyholders or the insured.
- Losses incurred in case policyholders have not insurable interests.
- Losses incurred by suspension from construction or losses incurred by consequences of suspending works wholly or partly.
- Losses to data, software and computer programs.
- Losses incurred by design faults of consultancies for construction works at class II or higher.
- Losses incurred by corrosion, abrasion and oxidation.
- Losses incurred by decay and taking place under pressure conditions, normal temperature (this regulation is only applied to construction works prescribed in Point a Clause 1 Article 37 of Decree 67/2023/ND-CP).
- Losses incurred by hard scale formation such as rust, dregs or other similar phenomena (this regulation is only applied to construction works prescribed in Point b Clause 1 Article 37 of Decree 67/2023/ND-CP).
- Expenses for repair, replacement, correction of defective materials or workmanship. This exclusion is only applied to losses of items that are directly affected and is not applied to losses of other items which were caused by indirect consequences of defects in materials or workmanship and have not caused improper construction.
- Losses or damages only detected at the time of inventory.
What are the cases of insurance exclusions for construction works in progress in Vietnam according to Decree 67/2023/ND-CP?
What is the insurance period of a compulsory insurance for construction works in progress in Vietnam?
Pursuant to the provisions of Article 36 of Decree 67/2023/ND-CP stipulating the insurance period of a compulsory insurance for construction works in progress as follows:
Insurance period | Construction works |
For an insured construction work whose value is under VND 1.000 billion, excluding installation or including installation but the cost for installation accounts for less than 50% of its total value, its insurance premium and deductible shall be determined according to Clause 1 Section I Annex III enclosed with Decree 67/2023/ND-CP. | The insurance period specified in the policy shall be from the commencement date to the completion date of construction on the basis of the decisions on investment issued by competent authorities, including amendments thereto (if any). The insurance period for components or items of a construction work which have been handed over or brought into use shall be terminated from the date on which such components or items are handed over or brought into use. |
For an insured construction work whose value is under VND 1.000 billion, including installation and the cost for installation accounts for at least 50% of its total value, its insurance premium and deductible shall be determined according to Clause 1 Section II Annex III enclosed with Decree 67/2023/ND-CP. | The insurance period specified in the policy shall be from the commencement date of construction on the basis of the decisions on investment of competent authorities, including amendments thereto (if any), to the date on which the construction work is handed over or after the date on which the first load test is completed, depending on whichever comes first, but not more than 28 days from the beginning date of testing. The insurance period for used equipment installed on the construction work shall be terminated from the beginning date of testing of such equipment. |
What is the responsibility of investors to purchase insurance for construction works in progress in Vietnam?
Pursuant to the provisions of Article 38 of Decree 67/2023/ND-CP, an investor shall purchase insurance for a construction work or each item of the construction work in progress. Some specific cases:
- For purchase of insurance for a construction work in progress, the investor shall purchase insurance with the minimum coverage prescribed in Article 33 of Decree 67/2023/ND-CP.
- For purchase of insurance for each item of the construction work in progress, the investor shall purchase insurance, provided the insurance coverage for each item is not smaller than its full value upon completion, and the total insurance coverage for all items of the work during construction is not smaller than the minimum coverage prescribed in Article 33 of Decree 67/2023/ND-CP.
In particular, minimum coverage for compulsory insurance for construction works in progress refers to the full values of construction works upon completion, including all building materials, workforce costs, equipment installed on construction works, transport costs, taxes, other fees and other items provided by investors. Minimum coverage for construction works in progress shall not be allowed to be lower than total construction policy value, including values subject to amendments and revisions (if any).
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