Building insurance gains traction from regulators, lawmakers

With regulators and lawmakers putting modalities in place to fully implement building insurance in the country, victims of subsequent disasters are set to get paid for losses. Sunday Ojeme reports

 

 

Effort by the Federal Government to ensure Nigerians embrace all aspects of Compulsory Insurances is gaining strength following insurance regulators and lawmakers’ synergy on public building insurance.

The latest determination, which began two weeks ago with a meeting between the National Insurance Commission (NAICOM), Nigerian Insurers’ Association (NIA) and Federal Fire Service, was given another traction last week when the bill seeking to amend Insurance Act 2003 passed through second reading at the Senate.

The amendment is expected to set minimum limit of compensation in the event of death, injury or loss of property of third parties with respect to insurance of public buildings and buildings under construction, has passed through second reading at the floor of the Senate.

According to Section 65 of that Act, owner or occupier of every public building is to be insured against liability for loss or damage to property or death or bodily injury caused by collapse, fire, earthquake, storm or flood.

The Act defines a public building as one to which members of the public have access for educational, recreational, medical and commercial purposes. The penalty for non-compliance is a maximum fine of N100,000 or one year imprisonment or both.

Similarly, the Section 64 of the Act requires that every owner or contractor of any building under construction with more than two floors must take out an insurance policy to cover liability against construction risks caused by his negligence or that of his servants, agents or consultants, which may result in death, bodily injury or property damage to workers on site or members of the public.

This insurance policy also covers liability for collapse of buildings under construction. Failure to comply with this provision is an offence punishable with a fine of N250,000 or three years imprisonment or both.

The bill sponsored by Senator Umaru Kurfi – Katsina Central, suggests that Section 64 of the Act be amended by substituting for the existing sub-section 3, a new subsection 3, which should read: a person who contravenes subsection 1 of this section commits an offense and on conviction shall be liable to:

A fine of N500,000 or imprisonment for three years or both, payment of the sum of N1 million in respect of injury and unlimited liability in respect of death.

The bill also wants section 65 of the principal Act amended by inserting after the existing subsection 4, a new subsection 4, which should read: the limit of the liability for the taken out pursuant to subsection 3 of this section shall be: In respect of death, unlimited, in respect of injury N1 million and in respect of damage to property N1 million.

Compulsory insurance

Two weeks ago, NAICOM, NIA and FFS agreed to embark on the enforcement of this aspect of Compulsory Insurance nationwide in a bid to sanction owners of any such classified buildings without proof of insurance coverage.

Following some of the resolutions, insurance operators were directed to henceforth clarify in their returns the premium they make on insurances of public building in line with the provisions of the Section 65 (4) of the insurance Act 2003.

This provides that the insurance companies would support the Fire Service with part of the premium paid to fire underwriters for protection against fire disaster According to the Commissioner for Insurance, Mohammed Kari, henceforth, the implementation would be enforced by the fire services, which is empowered to demand from any public building owner the proof of fire insurance coverage.

He said sensitisation would be carried out to ensure that nobody is left in doubt of which building or premise is classified as public building. “Failure to respect the law will be dealt with severe consequences by the enforcement agencies, which will be in this case, the fire services,” Kari said.

In the same vein, the Comptroller General, FSS, Anebi Joseph Garba, lamented the tragedies fire had caused in the country, saying that most of the edifices affected by fire disaster had no fire insurance covers.

He made reference to Section 48 and 89 of the National Fire Code, which empowers the fire service to carry out risk assessment of any public building and to demand for insurance certificate.

While expressing optimism that the insurance industry would record more funds if the whole process takes off, he regretted that in some states, the FFS lacked logistics such as utility vehicles to inspect buildings and enforce insurance coverage. On his part, Chairman, NIA, Eddie Efekoya, said the development marked a milestone as far as protection against fire disaster was concerned.

While reaffirming the association’s support for the implementation of the Act, he said it had taken almost 14 years for its implementation. “Insurance can compensate materially but really cannot compensate the trauma we all get from it.

The waste in terms of the money spent for compensation or reconstructing the destroyed building would have been channeled to other profitable ventures,” he added.

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