Regulations on insurance and maintenance under construction contracts in Vietnam

Regulations on insurance and maintenance under construction contracts in Vietnam (Internet image)

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

1. Regulations on insurance and maintenance under construction contracts in Vietnam

Regulations on insurance and maintenance under construction contracts in Vietnam according to Article 46 of Decree 37/2015/ND-CP are as follows:

* Insurance

- The investor shall buy insurance for the works during the construction period that may impose adverse effects on community safety, environment or for the works of peculiar technical structures and complicated construction conditions. In case this insurance cost has been included in the contractual price, the contractor must buy the insurance as regulated.

- The contractor (in case of the contract for consultancy) shall buy professional liability insurance for the tasks of construction survey, construction design of construction works from Grade II and over.

- The contractor must buy other necessary insurance types (insurance for workers on the site, insurance for equipment, insurance for the third party...) to ensure its activities according to the law provisions.

* Maintenance

- The contractor shall be responsible for carrying out maintenance to the works and equipment as agreed in the contract. Agreements by the two parties on period of maintenance, level of maintenance guarantee must accord with the law on construction.

- Maintenance guarantee can be made in the form of guarantee or other forms as agreed by the two parties but form of guarantee is preferred.

- Maintenance guarantee shall be refunded to the contractor only after the period of maintenance is completed and confirmation from the investor on completion of maintenance is issued.

- During the period of maintenance, the contractor must carry out maintenance within 21 days since receipt of repair notice from the employer; during this period, if the contractor fails to carry out maintenance, the employer has the right to use the maintenance cost for hiring other organizations, individuals to do the work.

2. Regulations on labor safety, environmental protection and fire & explosion prevention and fighting in construction contracts in Vietnam

Regulations on labor safety, environmental protection and fire & explosion prevention and fighting in construction contracts according to Article 48 of Decree 37/2015/ND-CP are as follows:

- Responsibilities of the parties for labor safety must be agreed in the contract and prescribed as follows:

+ Construction contractor must establish safety measures for people, machinery, equipment and the works on the site including adjacent construction works. In case safety measures are related to multiple parties, they must be agreed by the two parties.

+ Safety measures, rules on labor safety must be made public on the construction site; dangerous positions on the site must be set up with people for guidance and warnings about accidents.

+ Construction contractor, the investor and related parties must frequently examine and supervise labor safety on the site. Upon detection of any violation of labor safety, construction must be suspended immediately. Any person who leaves labor safety violations to happen within his/her management shall be responsible to the law.

+ The construction contractor shall be responsible for training, instructing and disseminating regulations on labor safety among its workers. As for some works of strict safety requirements, workers must obtain certificate of labor safety training.

+ The construction contractor shall be responsible for providing adequate personal protective equipment to the workers on the site as prescribed.

+ When an incident in labor safety happens, the construction contractor and other related parties shall be responsible for handling and making the report to state management agencies according to law provisions and at the same time taking remedial work and making compensation for the losses caused.

- Responsibilities of either party for environmental protection must be agreed in the contract and prescribed as follows:

+ The construction contractor must take measures to ensure environmental safety to the workers on the site and surrounding area including measures to control dust, noise and site clean-up; wastewater, solid waste and other types of waste must be collected for treatment to reach technical regulations and standards on environment. As for the construction works in urban area, measures such as screening and transport of scraps to right place must be taken.

+ During the transport of building materials, measures for screening scraps must be taken to ensure safety and environmental hygiene.

+ The construction contract, the investor must be responsible for examining and monitoring the implementation of constructional environmental protection, at the same time being subject to examination and monitoring by state management agencies. In case the construction contractor fails to comply with regulations on environmental protection, the investor and state management agencies have the right to temporarily suspend the construction and ask the contractor to comply with environmental protection measures.

+ Organizations, individuals that leave any harmful act to the environment during the construction shall be responsible to the law and make compensation for losses caused.

- The parties to the contract must comply with applicable regulations on fire & explosion prevention and fighting.

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