THE MINIMUM INSURANCE SUM IS VND 100 MILLION/ WORKERS/CASE
In accordance with the Decree No. 119/2015/ND-CP dated November 13, 2015 of the Government prescribing compulsory insurance in construction investment activities, for insurance for workers on construction sites: The minimum insurance sum is VND 100 million/person/case. The specific indemnities for workers who are injured or die due to labor accidents or occupational diseases must comply with the guidance of the Ministry of Finance.
Similarly, except for works related to national defense, security and state secrets, project owners or contractors, if work insurance premiums are already included in contractual prices, shall buy underway work insurance for works and work items which affect the community safety; construction investment works which greatly affect the environment and are on the list of projects subject to environmental impact assessment; and amending, supplementing or replacing documents (if any); works with special technical requirements and complicated construction conditions as prescribed by the law on construction and relevant laws. Consultancy contractors shall buy construction investment consultancy professional liability insurance for jobs of construction survey and construction design of construction works of grade II or higher grade. Within that, for underway work insurance: The minimum insurance sum is the full value of a completed work which, however, must not be lower than the total value of the construction contract, including the adjusted or added value (if any). For construction investment consultancy professional liability insurance: The minimum insurance sum equals the value of the consultancy or design contract.
Besides, the Decree also prescribes that in order to ensure the financial safety of insurance enterprises and reinsurance enterprises and guarantee the interests of insurance buyers, based on their respective financial capacity and risk appraisal results, insurance enterprises and reinsurance enterprises shall decide to provide compulsory insurance or inward reinsurance in construction investment activities as the compulsory level of retention on each risk or each separate loss does not exceed 10% of the equity. If insurance enterprises provide outward reinsurance as designated by the insured (fronting), the designated reinsurance rate must not exceed 90% of the insured liability level.
This Decree takes effect on February 10, 2016.
