Which physical losses regarding construction investment activities shall insurers in Vietnam indemnify?

Which physical losses regarding construction investment activities shall insurers in Vietnam indemnify?

Pursuant to Clause 2 Article 12 of the Circular 50/2022/TT-BTC stipulating as follows:

2. Insurers shall only indemnify for physical losses that policyholders actually suffer from and when such amounts have been included in the insurance payout.

What are regulations on the indemnification for each category of properties prescribed in construction investment insurance policies in Vietnam?

Pursuant to Clause 3, 4, 5, 6 and 7, Article 12 of the Circular 50/2022/TT-BTC stipulating as follows:

3. The indemnification for each category of properties prescribed in insurance policies shall not exceed the insurance payout of such category of properties. The total insurance payout shall not exceed the total insurance payout prescribed in insurance policies. Specific cases:

a) Losses that can be repaired shall be repaired, and the insurance payout is the necessary fund to restore categories suffered from losses to their previous state before losses after deducting the part of value subject to retrieval (in case policyholders retrieve properties suffered from losses) and deductibles.

b) In case of a total loss, the insurance payout is the market value of the category at the time or the place of losses and the actual level of damage minus deductibles. If policyholders retrieve properties suffered from losses, the insurance payout is the actual value of such categories at the time or the place of losses minus deductibles and values of the retrieved properties that suffered from losses.

4. Insurers shall cover temporary repair costs if such repair is a part of the official repair and does not increase the total repair cost according to the final scheme for the repair of categories suffered from losses.

5. Insurers are not responsible for indemnifying the costs of modifying, supplementing, and upgrading insured categories.

6. If policyholders conclude compulsory insurance policies for works during construction time with 2 or more insurers to insure the same subject, with the same conditions and insurance events, when insurance events occur, each insurer is only responsible for indemnification according to the ratio between the agreed insurance payout to the total insurance payout of all insurance policies concluded by policyholders. The total insurance payout of insurers shall not exceed the damaged value of properties.

7. Insurers are not responsible for indemnifying the amounts that occurred or increased due to acts of insurance fraud according to regulations of the Criminal Code.

What are regulations on indemnification documents for compulsory insurance for works during construction time in Vietnam?

Pursuant to Article 13 of the Circular 50/2022/TT-BTC stipulating indemnification documents for compulsory insurance for works during construction time in Vietnam as follows:

Insurers shall cooperate with policyholders, the insured, and relevant agencies, organizations, and individuals in collecting documents related to the preparation of indemnification documents. Indemnification documents on compulsory insurance for works during construction time include:

1. Documents requesting the indemnification of the policyholders.

2. Documents related to insurance subjects, including Insurance Policies and Certificates of Insurance.

3. Documents proving the damage to properties, including:

a) Documents on construction work incidents (certified copies or copies confirmed by parties that prepare the documents) according to regulations prescribed in Article 47 of Decree No. 06/2021/ND-CP dated January 26, 2021 of the Government of Vietnam elaborating on quality management, construction, and maintenance of construction works.

b) Valid receipts and invoices in case of repairing or replacing properties.

4. Documents proving necessary and reasonable expenses that policyholders have spent to minimize losses or to implement instructions of insurers.

5. Records of the assessment of causes and the extent of damage prepared by insurers or persons authorized by insurers.

6. Other relevant documents (if any).

Best regards!