What are regulations on insurance subjects and the minimum insurance payout of compulsory insurance for works during construction time in Vietnam?

What are regulations on insurance subjects and the minimum insurance payout of compulsory insurance for works during construction time in Vietnam?

Pursuant to Article 7 of the Circular 50/2022/TT-BTC stipulating insurance subjects and the minimum insurance payout of compulsory insurance for works during construction time in Vietnam as follows:

1. Insurance subjects of compulsory insurance for works during construction time are works and categories of works prescribed in Clause 1 Article 4 of Decree No. 119/2015/ND-CP dated November 13, 2015 of the Government of Vietnam on compulsory insurance for construction and investment activities and Clause 2 Article 1 of Decree No. 20/2022/ND-CP dated March 10, 2022 of the Government of Vietnam on amendments to Decree No. 119/2015/ND-CP.

2. The minimum insurance payout for compulsory insurance for works during construction time according to regulations prescribed in Clause 1 of this Article is the total value of works after completion, including all materials, personnel costs, devices installed in such works, transport fees, tax types, other fees, and other categories provided by investors or contractors. The minimum insurance payout for works during construction time shall not be lower than the total value of construction contracts, even the adjusted or supplemented value (if any).

What are regulations on insurance scope and exclusion of insurance responsibility of compulsory insurance for works during construction time in Vietnam?

Pursuant to Article 8 of the Circular 50/2022/TT-BTC stipulating insurance scope and exclusion of insurance responsibility of compulsory insurance for works during construction time in Vietnam as follows:

1. Insurance scope

Insurers shall implement insurance responsibilities for losses of works during construction time that arise from any risk, except for cases of exclusion of insurance responsibilities prescribed in Clause 2 of this Article.

2. Exclusion of insurance responsibilities.

Cases of exclusion of insurance responsibilities for compulsory insurance for works during construction time:

a) Exclusion of the general insurance responsibility according to regulations prescribed in Article 5 of this Circular.

b) Losses caused by errors in the design of advisory contractors regarding construction works.

c) Losses caused by corrosion, abrasion, and oxidation.

d) Losses caused by the phenomenon of rotting that takes place under conditions of normal pressure and temperature (this regulation only applies to construction works prescribed in Point a Clause 1 Article 10 of this Circular).

dd) Losses cause by the phenomenon of hard scale formation such as rust, deposition, or other equivalent phenomena (this regulation only applies to construction works prescribed in Point b Clause 1 Article 10 of this Article).

e) Costs of repair, replacement, and correction of defects in materials or workmanship errors. This exclusion only applies to losses of categories that are directly affected and does not apply to losses of other categories that are indirect consequences of defects in materials or workmanship errors.

g) Losses or damage that can only be detected at the time of inventory.

What is the duration of compulsory insurance for works during construction time in Vietnam?

Pursuant to Article 9 of the Circular 50/2022/TT-BTC stipulating duration of compulsory insurance for works during construction time in Vietnam as follows:

The insurance duration of compulsory insurance for works during construction time shall comply with regulations prescribed in Clause 1 Article 5 of Decree No. 119/2015/ND-CP, specifically:

1. Regarding construction works prescribed in Point a Clause 1 Article 10 of this Circular: the insurance duration prescribed in insurance policies, starting from the start to the end date of construction time, shall be based on documents of authorities competent to decide on investment (including adjustment and supplement (if any)). The insurance duration for each division and category that has been handed over or put into use shall end after such division and category have been handed over or put into use.

2. Regarding construction works prescribed in Point b Clause 1 Article 10 of this Circular: the insurance duration prescribed in insurance policies, from the start to the end date of construction time, shall be based on documents of authorities competent to decide on investment (including adjustment and supplement (if any)) until the handover of the works or after the completion of the first load testing, whichever comes first, but shall not exceed 28 days after the date of the test run. The insurance duration for used devices installed in works shall end at the time of test running such devices.

Best regards!