Responsibility to purchase compulsory insurance in construction investment activities

Buy compulsory insurance in construction investment activities ensures financial security for investors and contractors during construction project implementation. Participating in insurance helps minimize risks, meet legal requirements, and protect the rights of stakeholders in construction activities. The following article by Long Phan will analyze in detail the regulations on the responsibility to buy compulsory insurance in the construction sector.

Types of insurance in construction investment activities

Vietnamese law regulates five main types of insurance in the construction sector. Investors and contractors need to clearly understand the scope of application of each type of insurance. Choosing the right type of insurance helps ensure compliance with legal regulations.

According to the provisions of Clause 1, Article 9 of the Law on Construction 2014, types of insurance in construction investment activities include:

• Construction insurance during construction;
• Professional liability insurance for construction investment consulting;
• Insurance for supplies, materials, vehicles, construction equipment, and workers;
• Civil liability insurance for third parties;
• Construction work warranty insurance.

Who must buy compulsory insurance in construction investment activities?

The law clearly defines the subjects required to participate in construction insurance. Investors and contractors need to strictly comply with this regulation.

Pursuant to Article 32 of Decree 67/2023/ND-CP in construction investment activities, the following subjects are required to buy insurance:

1. Works and construction items that have a major impact on safety and community benefits are specified in Appendix X of Decree No. 15/2021/ND-CP.
2. Construction investment projects have a high risk of adverse impact on the environment or have a risk of adverse impact on the environment specified in Appendix III and Appendix IV of Decree 08/2021/ND-CP and belong to The list of investment projects must undergo environmental impact assessment according to the provisions of the Law on Environmental Protection.
3. The project has specific technical requirements and complex construction conditions according to the provisions of construction law and other relevant laws.

Regulations on the responsibility to buy compulsory insurance in construction investment activities

According to Clause 2, Article 9 of the Law on Construction 2014 (amended and supplemented in 2020), regulations on the responsibility to buy compulsory insurance in construction investment activities are as follows:

• Investors purchase construction insurance during the construction period for projects that affect community safety, the environment, projects with specific technical requirements, and complex construction conditions;
• Consulting contractors purchase professional liability insurance and provide construction investment consulting for construction survey work and construction design of construction projects of level II or higher;
• Construction contractors purchase insurance for construction workers on the construction site and civil liability insurance for third parties.

Compulsory insurance period in construction investment activities

The insurance period is specified in detail for each type of project. The parties need to determine exactly when the insurance begins and ends. Maintaining insurance on time ensures continued protection. According to Article 36 of Decree 67/2023/ND-CP, the insurance period is determined as follows:

1. For construction works specified in Point a, Clause 1, Article 37 of this Decree:

• The insurance period is stated in the insurance contract, calculated from the start date to the end date of the construction period based on the document of the competent authority deciding on investment including adjustments and supplements (if any).
• The insurance period for construction parts and items that have been handed over or put into use will end from the time those parts and items are handed over or put into use.

2. For construction works specified in Point a, Clause 1, Article 37 of this Decree:

• The insurance period is stated in the insurance contract, calculated from the start date of the construction period based on the document of the competent authority deciding on investment, including adjustments and supplements (if any) until handover of the project or after completion of the first load test, whichever comes first, but not later than 28 days from the date of commencement of the test run.
• The insurance period for used equipment installed in the project will end from the moment the equipment begins to be tested.

Consulting on purchasing compulsory insurance in construction investment activities

In the process of purchasing compulsory insurance in construction investment activities, you need to choose a reputable insurance consulting unit as well as use professional consulting and support services to ensure and optimize your benefits. Long Phan provides comprehensive consulting services on compulsory insurance in construction investment activities. Specifically, Long Phan’s services include:

• Consulting on choosing the right insurance package for each type of project.
• Review documents and evaluate insurance contract terms.
• Draft and negotiate insurance contracts with insurance companies.
• Support for dispute resolution and insurance compensation.
• Consulting on compliance with legal regulations on construction insurance.

With the motto of accompanying and protecting customer interests, Long Phan brings optimal solutions for each specific project. For detailed advice and support, please contact Long Phan via the hotline 0906735386. Long Phan believes that with extensive experience and expertise, Long Phan will be a reliable partner, accompanying your success in every construction project.