A work is subject to compulsory insurance during construction as prescribed in Decree No. 119/2015/ND-CP dated November 13, 2015 of the Government.

Due to objective reasons, the insurance period under the contract expires, the work has not been completed or handed over, and the construction period must be extended. The insurance contractor terminates the contract. The investor must purchase insurance from another insurance company to insure the construction of the work for a prolonged period.

In the above case, the determination of the minimum insurance amount and insurance premium for the extended construction period must comply with what regulations?

The Ministry of Construction responded to this issue as follows:

According to the provisions of Clause 1, Article 4 of the Government's Decree No. 119/2015/ND-CP dated November 13, 2015 stipulating compulsory insurance in construction investment activities, the investor (or the contractor in the field of construction investment). In case the construction insurance premium is already included in the contract price), construction insurance must be purchased during the construction period for some types of works. This cost is included in the total investment in the construction of the work.

According to the provisions of Clause 1, Article 5 of Decree No. 119/2015/ND-CP, the construction insurance period during the construction period is from the start date to the end date of the construction period based on the authorized documents of the construction (including adjustments and supplements, if any) and is recorded in the insurance contract.

Therefore, it is proposed to clarify the responsibilities of the subjects about the content related to the insurance term agreement in the signed insurance contract and the compliance with the provisions of law on this content.

Whether or not to buy additional insurance and how much insurance is purchased during the extended construction period, he can consult the Ministry of Finance for guidance on compliance with the law.

In case additional purchases are allowed, the additional costs can be taken from contingency expenses (for arising workloads) in accordance with the law on management of construction investment costs.