SGI Seoul Guarantee Insurance Launches Private Construction Payment Guarantee Product

[Asia Economy Reporter Oh Hyung-gil] SGI Seoul Guarantee Insurance announced on the 23rd that it has launched a construction payment guarantee product that allows construction companies performing private construction projects to directly subscribe to insurance without requesting it from the client.

According to the amendment to the Framework Act on the Construction Industry, which was enacted last month, when the client finds it difficult to fulfill payment guarantees or provide collateral, the contractor can subscribe to insurance, and the client must pay the insurance premiums. Violations will result in fines.

However, in reality, it has not been easy for contractors to request this from clients, and even if requested, it often has not been fulfilled.

Additionally, the performance of construction payment guarantee products issued by clients has been minimal, causing many sites to struggle with not being compensated for increased construction costs, and the number of civil lawsuits related to construction payments has not decreased annually.

In response, Seoul Guarantee explained that it has introduced an additional private construction payment guarantee product besides the guarantee products subscribed to by clients.

A Seoul Guarantee official said, "Through subscribing to the construction payment guarantee product, subcontractor construction companies can be compensated for damages even if they do not receive construction payments due to client bankruptcy," adding, "It is expected that disputes related to construction payments will significantly decrease and fair trade practices between clients and primary contractors will be established."

This content was produced with the assistance of AI translation services.