In the intricate realm of insurance contract disputes, the role of Vietnam insurance law firms becomes critical, as every nuance in a contract can significantly impact the case’s resolution. A prime illustration of this is the case 05/2023/KDTM-PT dated 20/03/2023, involving DN Import-Export Limited Liability Company and BD Joint Stock Insurance Corporation. Drawing from the expertise typical of Vietnam insurance law firms, Unilaw provides insightful guidance for insurance companies, underscoring the importance of legal precision in such matters.
Case Summary:
Plaintiff: DN Limited Liability Company vs Defendant: BD Joint Stock Insurance Corporation. Relevant Third Party: DNA Bank.
Case Content: On 13/05/2019, DN Company and BD Insurance signed a contract for fire and special risks insurance, including mandatory fire and explosion coverage, for a total insured sum of 48,330,125,550 VND. On 23/07/2019, an insurable event occurred due to a storm, resulting in losses for DN Company. They promptly notified BD Insurance, who refused compensation as the damage was not covered under the policy. The insurance contract involved fire and special risks coverage as per the BD Insurance Corporation’s Fire and Special Risks Insurance Rules and Decree 23/2018/NĐ-CP. Loss assessment by the court-appointed assessor estimated damages at 1,735,859,918 VND.
Legal Dispute: DN Company contended that their insurance contract included fire, explosion, and special risks. However, BD Insurance only covered fire and explosion, excluding storm and whirlwind. There was inconsistency between the contract and the insurance certificate, with a lack of information on special risks.
First Instance Court Decision: DN Company’s claim for compensation of 1,735,859,918 VND from BD Insurance was rejected. DN Company appealed against the entire first instance judgment. Appellate Court Decision: Accepted DN Company’s appeal. BD Insurance was ordered to compensate DN Company 1,735,859,918 VND. BD Insurance was also to refund DN Company 55,000,000 VND for loss assessment costs and bear the first instance court fee of 64,075,798 VND. DN Company was to be reimbursed for the provisional court fee paid.
Reasons for Appellate Court’s Decision: The court determined BD Insurance violated the Insurance Business Law by not providing comprehensive information on special risks in the Insurance Rules, leading to DN Company’s misunderstanding about the risks covered. Specifically:
- Inconsistency Between Contract and Insurance Certificate: BD Insurance drafted an insurance contract that did not ensure consistency between the contract and the insurance certificate, leading to confusion and misinformation for DN Company regarding the actual insurance coverage.
- Lack of Information on Insurance Rules: BD Insurance failed to provide complete information on the Insurance Rules and did not clearly explain terms related to special risks to DN Company. This breached clause 2 of Article 17 of the 2000 Insurance Business Law, requiring insurance companies to provide comprehensive information on insurance exclusion terms.
- Missing Information on Exclusion Clauses: The insurance contract did not include exclusion clauses for 8 remaining risks beyond fire and explosion, failing to comply with legal regulations.
- Misunderstanding of Insurance Coverage: Due to the lack of information and clarity in the contract, DN Company believed they were insured for “storm, whirlwind” included in the 10 special risks, while BD Insurance assumed only fire and explosion were covered.
- Given these errors, the Judicial Council concluded that BD Insurance was at fault for not providing full and clear information, misleading DN Company, and violating the Insurance Business Law regulations.
Advice from Unilaw for Insurance Companies:
- Clarity and Consistency in Contracts and Certificates: Ensure that all information in insurance contracts and certificates is consistent and unambiguous. All terms, coverage scope, and exclusion conditions should be clearly and understandably presented.
- Comprehensive Information on Insurance Rules: Provide complete Insurance Rules to customers and clearly explain terms, especially those related to insurance exclusions.
- Effective Consultation and Support Before Signing Insurance Contracts: Provide professional and effective consultation services so customers understand insurance products and make informed choices.
- Compliance with the Law: Ensure that all business activities and insurance contracts comply with legal regulations, particularly the Insurance Business Law.
- Building and Maintaining Good Customer Relationships: Establish and maintain trust and long-term relationships with customers through accurate, transparent information provision and proactive customer support.
- Regular Updates and Training for Employees: Ensure all employees, especially those directly interacting with customers, are regularly updated and trained on new insurance products and related legal regulations.
- Risk Management and Internal Control Improvement: Improve risk management systems and internal controls to timely detect and address issues that may affect the company’s reputation and legal compliance.
This case highlights the role of Vietnam insurance law firms like Unilaw in assisting insurance businesses to comply with the law. Deep understanding and expertise from insurance law attorneys can prevent misunderstandings and disputes, fostering a healthy and fair insurance business environment.
For more information, please contact Vietnam Insurance Law Firm – Unilaw at phone number 0912266811 or email: legal@unilaw.vn.
Explore More Legal Topics
DEFINITIVE CONTRACT
HOTEL MASTER MANAGEMENT AGREEMENT
AGREEMENT ON DISPUTE SETTLEMENT COURT IN VIETNAMESE LAW
SIGNING A LABOUR CONTRACT IN VIETNAM
THE IMPORTANCE OF LEGAL SERVICES IN INVESTMENT: LESSONS LEARNED FROM INVESTMENT DISPUTES
INTERNATIONAL DISTRIBUTION AGREEMENT
MITIGATING LIABILITY RISKS: TIPS FOR SHIPPERS FROM UNILAW, A LEADING VIETNAMESE MARITIME LAW FIRM
TERMINATION OF THE LABOUR CONTRACT
