Decree No. 20/2022/ND-CP: Several amendments and supplements to compulsory insurance in construction investment activities

On March 10th, 2022, the Government issued Decree No. 20/2022/ND-CP amending and supplementing several articles of Decree 119/2015/ND-CP dated November 13th, 2015 stipulating compulsory insurance required in construction investment activities (hereinafter referred to as “Decree 20/2022”) with the following notable points:

(i) Decree 20/2022 supplements regulations on compulsory civil liability insurance towards third parties. Specifically, on the subject of compulsory insurance in construction investment activities, the Decree amends and supplements as follows: Construction contractors must purchase compulsory insurance for construction workers on the construction site and compulsory civil liability insurance for third parties. 

At the same time, the Decree additionally stipulates that the period of compulsory civil liability insurance for third parties is a specific period of time, counting from the date of commencement to the end of the construction period based on the construction contract and recorded in the insurance contract. 

In addition, the insurance enterprise is responsible for compensating construction contractors for amounts that, in accordance with the law, construction contractors are responsible for compensating third parties for non-contractual damage to health, life and property arising directly during constructing and other related expenses.

(ii) Decree 20/2022 supplements the following minimum amounts of compulsory civil liability insurance for third parties:

  • The minimum insurance amount for health and life loss is 100 million VND/person/case without any limitation to the number of losses.
  • The minimum insurance amount for property damage and related legal expenses (if any) is determined as follows:
    • For works valued at less than VND 1,000 billion, the minimum insurance amount for property damage and related legal costs (if any) is 10% of the value of the works for the entire insurance period without any limitation on the number of losses.
    • For works valued at VND 1,000 billion or more, the minimum insurance amount for property damage and related legal costs (if any) is VND 100 billion for the entire insurance period without any limitation on the number of losses.

The Decree No. 20/2022/ND-CP will be of full force and effect as of July 01st, 2022.

Download the legal update as a PDF here.

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