Insurance Law · 18.08.2026

Commercial Property Insurance in Vietnam: What the Decree Requires

If you run a factory, a warehouse, a hotel or a shopping centre in Vietnam, your property cover is not only a commercial decision — part of it is compulsory, and the rules on sum insured, exclusions and deductions are set by decree. This page sets out what the Vietnamese regime a…

Lawyer UnilawReading time: 5 min

By Lawyer Nguyen Nhu Hai – UniLaw LLC

Fire and explosion cover is compulsory for a facility with fire risk

Decree No. 67/2023/ND-CP governs compulsory fire and explosion insurance. Article 23(1) defines the insured subject matter as all of the assets of a facility with fire and explosion risk: buildings, structures and the assets attached to them, machinery and equipment; and goods and materials, including raw materials, work in progress and finished goods.

Article 23(2) requires the insured subject matter and its location to be stated expressly in the policy and in the certificate. A loss at an address that is not on the certificate is the most avoidable dispute in this field.

The minimum sum insured is market value, not book value

Article 24(1) sets the minimum sum insured at the market value of the Article 23(1) assets at the time the contract is made. Where market value cannot be established, Article 24(2) allows the parties to agree: for buildings, structures, machinery and equipment, the residual or replacement value at the date of contracting; for goods and materials, the value evidenced by valid invoices and documents.

The practical point is the annual one. Property values and stock levels move; the sum insured often does not. Under-insurance is discovered at the claim, not at renewal.

Ten named exclusions, and two that catch people out

Article 25(1) covers loss to the insured assets arising from fire and explosion. Article 25(2) then lists the exclusions for a facility with fire risk, other than a nuclear facility. They include earthquake, volcanic eruption and other natural upheaval; loss caused by political events or breaches of security and public order; assets burned or blown up by decision of a competent State authority; assets that self-ferment or self-heat, or that undergo a heat process; goods being burned to clear fields or land; and loss to data, software and computer programs.

Two are worth reading twice:

Article 25(2)(đ) — a direct lightning strike on the insured property that does not cause fire or explosion is excluded.
Article 25(2)(g) — electrical machinery, equipment or parts damaged by overload, excess pressure, short circuit, self-heating, electric arc or leakage are excluded whatever the cause, including lightning.

Between them, those two mean that an electrical event which stops short of a fire is usually outside the cover. Article 25(2)(h) also excludes loss from a deliberate act, and from a deliberate breach of fire-safety rules that was the direct cause of the fire or explosion.

The 20 per cent deduction for ignoring a fire-safety inspection

This is the provision most worth acting on before anything happens. Under Article 28(3), the insurer may reduce the indemnity by up to 20 per cent where the facility failed to implement the recommendations in the police fire-safety inspection record fully or on time, and that failure increased the loss.

So the inspection record is a claims document. Keep it, close the items on it, and keep the evidence that you closed them.

Notification: immediately, then in writing within 14 days

Article 28(1) requires the policyholder to notify the insurer immediately by any means of communication when a loss occurs, and then to notify in writing within 14 days of the date of the loss. Article 28(2) caps the indemnity at the sum insured for the damaged asset, less the deduction under Article 28(3).

Note that this sits alongside the general statute: Article 30(1) of the Law on Insurance Business No. 08/2022/QH15 gives one year from the insured event to file the claim, and Article 31(1) requires payment within the agreed period or, absent agreement, within 15 days of a complete and valid file — with interest on late payment under Article 31(2).

Premium and deductible are not entirely free

Article 26(1) sets the premium and deductible by the schedule in Appendix II for a facility whose total sum insured at one location is under VND 1,000 billion, and allows the insurer to adjust the premium up or down by at most 25 per cent according to risk. Article 26(2) lets the parties agree the premium for a facility at or above VND 1,000 billion at one location, on evidence confirmed by the lead foreign reinsurer, subject to a floor.

Where a commercial property claim is actually won

The certificate: the asset and the address must match the loss — Article 23(2).
The sum insured: reviewed against market value at each renewal — Article 24.
The cause: characterised as fire or explosion, and kept clear of the electrical exclusion — Article 25(2)(g).
The inspection file: recommendations closed, with proof — Article 28(3).
The dates: immediate notice, written notice within 14 days, and the one-year filing deadline — Article 28(1) and Article 30(1).
Cause and quantum in dispute: an independent surveyor under Article 53(2) of Law No. 08/2022/QH15, whose conclusion binds both parties, at the insurer’s cost under Article 53(1).

Cover beyond fire and explosion — business interruption, machinery breakdown, all-risks extensions — is voluntary and is governed by the policy wording and by the general contract rules in Law No. 08/2022/QH15, including the exclusion-clause evidence requirement in Article 19(2).

Legal basis cited above: Decree No. 67/2023/ND-CP, Articles 23, 24, 25, 26 and 28; Law on Insurance Business No. 08/2022/QH15, Articles 19, 30, 31 and 53.

This article sets out the general rules. If a claim of yours has been denied or reduced — see insurance lawyers in Vietnam, or call +84 912266811 for a first assessment and a fee quote before any work starts.