Mandatory fire and explosion insurance for apartment buildings is intended to ensure the safety of residents’ property and lives while minimizing losses in case of fire or explosion incidents.

I. Entities Required to Purchase Fire and Explosion Insurance for Apartment Buildings

According to current regulations in Vietnam, the following entities are required to purchase fire and explosion insurance for apartment buildings:

• Project Developers: In cases where the apartment building project remains under the ownership of the developer.
• Apartment Owners: When the apartment has been handed over to the owner, they are responsible for purchasing insurance for their private property and contributing to the building’s general insurance fund.

Thus, individuals who own apartment units or developers of apartment projects must purchase fire and explosion insurance for the area under their ownership and are also responsible for contributing to the mandatory fire and explosion insurance for shared areas.

II. Scope of Insurance and Exclusions from Mandatory Fire and Explosion Insurance

(1) Scope of Insurance: The insurance company is responsible for compensating for damages to insured subjects as specified in Clause 1, Article 23 of Decree 67/2023/ND-CP arising from fire and explosion risks, except for cases outlined in (2) and (3) below.

(2) Exclusions of Liability for Fire and Explosion Risks at High-Risk Facilities (excluding nuclear facilities). The insurance company is not liable for compensation in the following cases:

• Earthquakes, volcanic eruptions, or other natural disasters.
• Damage caused by political, security, or public safety incidents.
• Property burned or exploded under a decision by a competent state authority.
• Property that self-ferments or generates heat; property affected by a heat-based treatment process.
• Lightning directly strikes insured property without causing fire or explosion.
• Nuclear weapon materials causing fire or explosion.
• Machinery, electrical equipment, or parts thereof damaged by overload, overpressure, short circuits, self-heating, electrical arcs, or electric leaks, regardless of cause, including lightning.
• Damage caused intentionally by the insured; deliberate violations of fire safety regulations that directly cause fire or explosion.
• Damage to data, software, or computer programs.
• Damage caused by forest, bush, or grass burning, or intentional fires for clearing fields or land.

(3) Exclusions of Liability for Nuclear Facilities: The insurance company and the policyholder shall agree on the exclusions of liability for nuclear facilities, subject to the approval of the reinsurance company.

III. Penalties for Non-Compliance with Mandatory Fire and Explosion Insurance

Under the regulations, failure to purchase mandatory fire and explosion insurance for facilities required to do so will result in administrative penalties, as follows:

• For individuals: A fine ranging from VND 30 million to VND 40 million.
• For organizations: A fine ranging from VND 60 million to VND 80 million.

IV. About Us, Hankuk Law Firm

■ Hankuk Law Firm – Introduction

The goal of the legal services provided by HANKUK LAW FIRM is to support businesses, investors, and people. Our organization employs skilled Korean lawyers, partners, and professionals to provide legal services to businesses related to corporations and litigation.

To support the startup process, our lawyers and staff provide a wide range of services, including business law consulting, tax and immigration law consulting, real estate services, business consulting, marketing and communications, human resources, product distribution, franchise options, etc. We provide expert advice on every aspect of your business needs.

To protect the legitimate rights and interests of our clients and achieve the best results, we provide legal advice and participate in civil lawsuits related to business, labor, marriage, family, and inheritance.

■ Contact us now

For reliable and effective legal advice, please contact HANKUK LAW FIRM now. We are committed to providing you with the best possible answers and our team of experienced lawyers has extensive knowledge in many legal fields. We are always here to provide the most competent and dedicated support, whether you are dealing with contractual issues, commercial disputes or need guidance on foreign investment. HANKUK LAW FIRM is honored to have assisted hundreds of domestic and international clients in skillfully resolving complex legal issues as their trusted legal partner. Do not let legal issues hinder your success. Let us accompany you towards legal achievement and comfort. For prompt guidance and support to ensure your rights are always maintained at the highest standards, contact HANKUK LAW FIRM now.

■ Contact Hankuk Law Firm:

Website: http://hankuklawfirm.com/en/  FB: https://www.facebook.com/hankuk.lawfirm  Tiktok: https://www.tiktok.com/@hankuklawfirm Youtube: https://www.youtube.com/@hankuklawfirm6375 Email:  info@hankuklawfirm.com   SĐT: 0942.339.063