Fire and Explosion Insurance in Vietnam

Among the risks caused by human negligence, fire and explosion are the most serious. Despite numerous preventive measures being implemented, millions of large fire and explosion incidents occur around the world in general and in Vietnam in particular, resulting in serious damage to lives and properties. In response to the financial needs for recovering from such risks, fire and explosion insurance was introduced. In many countries, this insurance is mandatory for specific cases with high risks of fire and explosion. In Vietnam, fire and explosion insurance is required for individuals and organizations owning/managing hazardous properties (such as high-rise buildings, schools, hospitals, etc.), and encouraged purchasing for other cases. However, many obligated parties do not participate, while others with high risks may not meet the participation criteria or insurance businesses may refuse to sell. In addition, due to the characteristics of fire risks, property damage is often significant and challenging to determine the value of the damage, making appraisal and compensation faces many difficulties. This article will analyze the current situation of implementing fire and explosion insurance in Vietnam and propose measures to enhance the effectiveness of this insurance type.