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BULLETIN ON CAPITAL CONSTRUCTION LAW

COMPULSORY INSURANCE REGULATIONS

IN CONSTRUCTION ACTIVITIES

Compulsory insurance in construction investment activities is prescribed in the Government's Decree No. 119/2015 / ND-CP of November 13, 2015 and Circular No. 329/2016 / TT-BTC of December 26, 2015. 2016 of the Ministry of Finance

1. Subjects must buy compulsory insurance in construction investment activities

According to Article 4 of Decree No. 119/2015 / ND-CP dated November 13, 2015:

- Investors or construction contractors must buy work insurance during the construction period for the works:

+ Works and work items affecting community safety as prescribed in Annex II of the Government's Decree No. 46/2015 / ND-CP dated May 12, 2015 on quality management and public maintenance construction process;

+ Construction works with great impact on the environment on the list of projects subject to environmental impact assessment as prescribed in Appendix II and Appendix III of Decree No. 18/2015 / ND-CP dated February 14, 2015 of the Government providing for environmental protection planning, strategic environmental assessment, environmental impact assessment and environmental protection plan;

+ Works with specific technical requirements, complicated construction conditions according to the provisions of construction law and other relevant laws.

- Consulting contractors must buy professional liability insurance for construction investment consultancy for construction surveying and construction design works of grade II or higher.

- Construction contractors must buy insurance for construction workers.

2. Expenses for buying compulsory insurance in construction investment activities

According to Clause 4, Article 3 of Decree No. 119/2015 / ND-CP of November 13, 2015:

- For work insurance during construction: Insurance premiums are included in the total construction investment;

- Regarding professional liability insurance for construction investment consultancy: Insurance premiums shall be included in the consultancy product cost price;

- Insurance for construction workers: Insurance premiums are included in the cost of production and business.

3. Settlement of insurance premiums

According to Clause 6 Article 15 of Circular No. 329/2016 / ND-CP of December 26, 2016:

- In case the value of settlement of construction contracts increases compared with the estimated value approved by competent authorities, the insurance premium may be adjusted to increase accordingly. The insurance purchaser is responsible for paying the outstanding insurance premiums to the insurance enterprise.

- In case the value of construction contract settlement is lower than the approved value, the insurance premium may be reduced accordingly. The insurance enterprise must pay to the insurance buyer the excess amount of insurance premium. The insurance buyer is responsible for recovering this reduced premium from the insurance enterprise. In case the insurance buyer is a contractor in construction investment activities and the construction insurance premium has been included in the contract price, the contractor in construction investment activities must return to the construction investor the amount of fees. Insurance has been withdrawn from the insurance business.

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