Saudi Arabia: Implementation of standard IDI policy imminent
Source: Middle East Insurance Review | Jan 2020
The Saudi Ministry of Municipality & Rural Affairs and the Saudi Arabian Monetary Authority (SAMA) have jointly been developing a new standard inherent defects insurance (IDI) policy, which is expected to be made available in early 2020, said international law firm HFW.
In the initial phase of implementation, the requirements will apply to all private sector construction projects in the five major municipalities, namely Mecca, Medina, Riyadh, Jeddah Governorate and the Eastern Province. The first phase will last for a period of three years; thereafter there will be a review phase, and then the final requirements will be applied across the kingdom.
With the number of developments announced recently in Saudi Arabia, the country’s construction industry is going through a dynamic and exciting phase, HFW said in a commentary. As such, the regulatory authorities are taking a greater interest in insurance in this sector.
Tracing developments leading to the new standardised policy, HFW noted that in June 2018, the Ministry of Municipality & Rural Affairs introduced plans for a new law making the purchase of inherent defects insurance mandatory for all construction projects within the private sector. This was subsequently put into effect as a Resolution of the Council of Ministers (Resolution No. 509 issued on 5 June 2018). M