Principles of indemnification for compulsory insurance for construction works in progress in Vietnam

Principles of indemnification for compulsory insurance for construction works in progress in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

Principles of indemnification for compulsory insurance for construction works in progress in Vietnam

Insurance enterprises consider and settle insurance compensation according to the law on insurance business and according to the principles specified in Article 39 of Decree 67/2023/ND-CP, specifically as follows:

(1) When a loss on the work in progress is incurred, the policyholder shall cooperate with the insurer in settling the insurance claim as follows:

- Immediately notifying the insurer via contract information means, then submit a written notification to the insurer within 14 days from the date on which such loss is incurred.

- After submitting the written notification to the insurer, the policyholder may begin to repair or replace minor defects whose values do not exceed the corresponding deductibles prescribed in Decree 67/2023/ND-CP.

In other cases, before repairing or replacing the items that are damaged/lost, the policyholder shall have the loss assessed by the insurer. If the insurer does not carry out the assessment within 5 working days from the date on which the notification of the loss is received, except for force majeure or objective barriers, the policyholder and the insured have the right to repair or replace the items that are damaged or lost.

The insurer shall pay for the repair or replacement of the covered items that are damaged or lost if the policyholder and the insured repair or replace them promptly.

- Preserving components that are lost/damaged to be available for assessment by representatives or assessors of the insurer.

- Immediately notifying to public security authorities if the loss is incurred by the act of stealing.

- Implementing all measures within their capacity to minimize the loss.

- Implementing, cooperating and allowing the insurer to implement necessary actions and measures or agreeing to the request of the insurer in order to protect entitlements of the insurer after providing indemnity for covered losses according to regulations herein.

(2) When the loss on the work in progress is incurred, the insurer shall settle the insurance claim as follows:

- Carrying out a loss assessment according to regulations of law and preparing a record of assessment of causes and extent of damage according to the regulations in Clause 5 Article 40 of Decree 67/2023/ND-CP.

- Providing guidance and cooperating with the policyholder and relevant agencies, organizations and individuals in collecting adequate documents to make an insurance claim application.

(3) The insurer shall only provide indemnity for physical damages that the insured actually suffers and such damages have been included in the sum insured.

(4) The indemnity for each item of property specified in the insurance policy shall not exceed the sum insured of such property. The total insurance indemnity shall not exceed the total sum insured prescribed in the insurance policy. Some specific cases:

- If the damage can be repaired, it must be repaired and the insurance indemnity shall be the expenditure necessary to restore the status quo of the items that are lost/damaged minus the recovered value (in case the policyholder recalls the property) and the deductible.

- If the loss cannot be repaired, the insurance indemnity shall be the market price of the item when and where the loss occurs and the extent of damage minus the deductible. If the policyholder recalls the property that is lost/damaged, the insurance indemnity shall be the real value of such item when and where the loss occurred minus the deductible and the recovered value of the property.

(5) The temporary expense for repair shall be incurred by the the insurer if the repair constitutes the official repair and does not cause any increase in the total repair expense according to the final revised plan of the item that is lost/damaged.

(6) The insurer is not liable for indemnifying all expenses for renovation, supplementation and upgrade of the insured items.

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE