Who must purchase compulsory insurance in construction investment operation? What is the compulsory insurance period in construction investment operations in Vietnam?
What is the principle of joining compulsory insurance in construction investment operations in Vietnam?
According to the provisions of Article 3 of Decree 119/2015/ND-CP and Clause 1, Article 1, Article 2 of Decree 20/2022/ND-CP, the participation in compulsory insurance in construction investment operations has the following principles:
1. Insurance enterprises, reinsurance enterprises, reinsurance assuming enterprises, and foreign reinsurance assuming organizations, must meet regulatory conditions for sale of compulsory insurance for construction investment activities as defined in Section 2 Chapter II hereof.
2. An insurance enterprise shall provide compulsory insurance for their construction investment activities on conditions that an insurance buyer fully meets regulatory requirements relating to construction investment capability as stipulated by the Construction Law and other relevant laws and regulations.
3. Project owners, consultancy service contractors and engineering construction contractors (hereinafter referred to as insurance buyer), and insurance enterprises, shall sell and purchase compulsory insurance for construction investment activities under regulations on liabilities, insurance premiums and sums assured referred to in this Decree and instructions set out by the Ministry of Finance.
4. Costs paid for purchase of compulsory insurance for construction investment activities shall comply with the following regulations:
a) With respect to construction insurance which is valid during a construction period: Insurance premiums shall be included in the construction investment outlay;
b) With respect to professional liability insurance for construction investment consultancy: insurance premiums shall be included in the cost price of provision of consultancy service;
c) With respect to employees working at construction sites and compulsory third-party civil liability insurance: Insurance premiums shall be included in production and business costs
5. In addition to participating in compulsory insurance for construction investment activities under regulations on liabilities, insurance premiums and sums assured laid down in this Decree, insurance buyers are able to participate in insurance with liabilities, insurance premiums and sums assured which are higher on the basis of arrangements with insurance enterprises and in compliance with laws and regulations. Additional costs that may be incurred by buying insurance (if any) shall be consistent with paragraph 4 of this Article.
6. Organizations or individuals that do not belong to entities required to participate in compulsory insurance under the provisions of this Decree shall buy compulsory insurance for their construction investment activities on the basis of arrangements with insurance enterprises and in compliance with relevant laws and regulations.
Who must purchase compulsory insurance in construction investment operations in Vietnam?
According to the provisions of Article 4 of Decree 119/2015/ND-CP and Clauses 2 and 3 of Article 1 of Decree 20/2022/ND-CP, the subjects who have to purchase compulsory insurance in construction investment operations include:
"Article 4. Entities required to buy compulsory insurance for construction investment activities
1. Except for construction works related to national defence, security and state secret, project owners or contractors that fall within the case in which construction insurance premiums have been included in the contractual price must buy construction insurance which is valid during the construction period with respect to the following construction works:
a) Construction projects or project items which have great impacts on public safety and benefits as stipulated by Appendix X of Decree No. 15/2021/ND-CP dated March 3, 2021 of the Government elaborating certain regulations on management of construction projects and its amending or replacing documents (if any)
b) Construction projects having significant environmental impacts that belong to the list of projects subject to environmental impact assessment under the provisions of the Appendix II and III of the Government's Decree No. 18/2015/ND-CP dated February 14, 2015 on the scheme for environmental protection, strategic environmental assessment, environmental impact assessment and the plan for environmental protection in association with written amendments, modifications or substitutions (if any);
c) Construction projects which have particular technical specifications and are subject to complicated construction requirements in accordance with laws on construction and other relevant legislation.
2. Consultancy service contractors must buy professional liability insurance for provision of construction consultancy service with respect to the work of construction surveying and design for construction projects ranked II or higher.
3. Engineering construction contractors must buy compulsory insurance for employees working at construction sites and compulsory third-party civil liability insurance"
What is the compulsory insurance period in construction investment operations in Vietnam?
According to the provisions of Article 5 of Decree 119/2015/ND-CP and Clause 4, Article 1 of Decree 20/2022/ND-CP on compulsory insurance period in construction investment operations as follows:
"Article 5. Insurance validity period
1. The validity period of construction insurance during the construction progress means the specific time period from the opening date to the closing date of construction activities with reference to the investment decision (even including any modification or amendment if possible) issued by a competent authority and agreed upon in an insurance contract
2. Professional liability insurance for construction consultancy service shall be valid from the date on which agreed construction consultancy service is rendered to the date on which the warranty term of construction works ends in accordance with laws.
3. Insurance for employees working at construction sites shall be valid from the date on which they start performing their work to the date on which the warranty term of construction works ends in accordance with laws. The determination of specific validity period of insurance for employees working at construction sites shall be consistent with their employment contracts
4. Compulsory third-party civil liability insurance shall be a specific period, from the start date to the end date of the construction time according to the construction contract and included in the insurance policy."
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