Can the amount of compulsory insurance in investment construction be lower than the total value of the construction contract in Vietnam?

Can the amount of compulsory insurance in investment construction be lower than the total value of the construction contract in Vietnam?

Pursuant to Article 10 of the Decree 119/2015/NĐ-CP (amended by Clause 7 Article 1 of the Decree 20/2022/NĐ-CP) stipulating sum assured as follows:

1. With respect to insurance for works in progress: The sum assured is the full value of construction works upon completion but shall not be allowed to be lower than total construction contract value, including the value subject to amendments or revisions (if any).

2. With respect to professional liability insurance for construction investment consultancy: The sum assured equals consultancy and design contract value.

3. With respect to insurance for employees working at construction sites: The sum assured equals VND 100 million/policyholder/case. The specific coverage provided for employees that suffer injury or death caused by work accidents or occupational diseases shall be governed under the direction of the Ministry of Finance.

4. With respect to compulsory third-party civil liability insurance:

a) The minimum sum assured regarding damage of health or life is 100 million VND/person/case, not limiting the number of cases of damage or losses.

b) The minimum sum assured regarding damage of assets or related legal costs (if any) is:

- 10% of the value of the works for the entire valid duration of the insurance regarding works valued at less than 1.000 billion VND, not limiting the number of cases of damage or losses.

- 100 billion VND for the entire valid duration of the insurance regarding works valued at 1.000 billion VND or more, not limiting the number of cases of damage or losses.

As regulations above, the minimum insurance amount for construction during construction is the full value of the construction when completed, but not less than the total value of the construction contract, including the value of adjustments and supplements. Therefore, the amount of compulsory insurance in investment construction must not be less than the total value of the construction contract.

Can the amount of compulsory insurance in investment construction be lower than the total value of the construction contract in Vietnam? - Source: Internet

What is the insurance period in investment construction activities in Vietnam?

Pursuant to Article 5 of the Decree 119/2015/NĐ-CP (amended by Clause 4 Article 1 of the Decree 20/2022/NĐ-CP) stipulating insurance validity period as follows:

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.

Above are the insurance period in investment construction activities in Vietnam.

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