Research on Compulsory Inherent Defect Insurance of Building in China

The Development of Building Inherent Defects Insurance (BIDI) in developed counties indicated that it could reduce the inherent defects of the building and protect the clients free of lost from the inherent defects and damages. On the guide of former Ministry of Construction of the P.R.C, BIDI was carried out in ten selected regions in China. But it does not work well. By the spot investigation, we found that there is not enough market demand was the main obstacle to the development of BIDI. Through granting formatted questionnaire to the eligible companies and persons, we got 79 qualified samples. Applying statistical method to analyze samples, we found three reasons leading to market demand shortage. There are great different interests between the applicants and the beneficiaries. The developers have motivations and chances not to undertake the responsibility to engineering quality. There are some inapplicable insurance clauses in the current insurance provision of BIDI. After make clear of the conditions and the functions, we come to the conclusion that legal position of the compulsory BIDI is need to be established and the corresponding supporting system assumptions should be applied.