The Saudi Arabian Monetary Authority (SAMA) announced the issuance of the model version of the compulsory insurance policy for hidden defects, in implementation of Cabinet Decision No. (509) dated 09/21/1439 AH requiring contractors in non-governmental sector projects to insure hidden defects that appear in buildings and constructions after using it. In continuation of SAMA's role in developing the insurance industry in the Kingdom, and supporting the growth of the insurance sector's contribution to the national economy within a supervisory framework that ensures protection and efficiency of transactions.

                SAMA explained that the provisions of the model form specify the minimum coverage and exclusions to cover this type of risk. It takes into account the rights and obligations of the most important parties involved in the process of insuring the hidden defects of the insured, contractors and building owners, as well as local insurance companies, global reinsurance companies, and companies that provide technical inspection during the construction process. SAMA clarified that it is possible to review the model form of the compulsory insurance policy for hidden defects by visiting SAMA's website via (link).