How building insurance opens new solution to collapses
Between 2010 and 2020 building collapses rose to 77 percent in Nigeria with shocking fatalities. Cement makers, regulators and insurance experts recently gathered at a webinar organised by Lafarge Cement Plc to address the root causes of building collapses. STEPHEN ONYEKWELU writes about the solutions offered.
Building insurance and insurers are proving to be important parts of any solution to stop building collapses in Nigeria, conversations at the second edition of Lafarge Plc’s Concrete Ideas suggest.
Building insurance is one of the five compulsory insurance stipulated by the Insurance Act 2003 but has been far from being implemented at both federal and state levels.
Liability Insurance or Insurance of Buildings under Construction is a compulsory insurance policy for contractors and owners of buildings higher than two-storey.
Section 64 of the Insurance Act, 2003 requires that every owner or contractor of any building under construction with more than two floors must take an insurance policy to cover liability against construction risks caused by the negligence of the contractor, owner, servants, agents, and consultants which may result in death, bodily injury, or property damage to workers or the public. The insurance must be undertaken from the construction stage.
The purpose is to guard the public against construction risks that may be caused by negligence.
The insurance should also cover the collapse of the building.
The penalty for default is N250, 000- or three-year imprisonment or both. This penalty is easily ignored in addition to a weak judiciary system.
Bola Onigbogi, chief executive at CBO Insurance Brokers Ltd., said recurring building collapses show a need to enforce the compulsory building insurance as stipulated in the Insurance Act. She also emphasised the need to use competent insurance brokers for optimum value, whether for individual or corporate purposes.
“Majority of the builders responsible for building collapses are small-time players. But being small does not justify negligence if the laws are stringent,” Onigbogi pointed out as a participant in Lafarge organised ‘Concrete Ideas 2: Addressing the Root Cause of Building Collapse in Nigeria.’
Before a building collapses, many things must have gone wrong – from the quality of materials to the competence of human personnel.
In her reasoning, Onigbogi a building team should be led by a seasoned professional and supported by certified artisans. It is strange that Nigerian builders go to neighbouring countries in search of artisans. A failure of Africa’s most populous country’s vocational education.
Extending the argument, Ogho Okiti, managing director at BusinessDay who was also the moderator of the webinar asked whether building insurance and insurers do not hold to key to ensuring competence at construction sites.
This means engineers before they work on any building request to see the insurance policy.
Similarly, before insurers insure a building site, they ask to see the team of engineers, builders and artisans check for competition and qualification.
“As a regulator, I think the compulsory building insurance provision of the Act is something we would push. This is will be in terms of advocacy, sensitization, both in the formal and informal sectors and in partnership with professional organisations such as the Nigerian Society of Engineers and all its divisions,” said Dominic Akuboh who represented Ali Alimasuya Rabiu, president, Council for the Regulation of Engineering in Nigeria (COREN).
Kehinde Osifala, president of, Institute of Structural Engineers said insurers could help in regulating this. If an insurance company refuses to insure a building site because the person who designed it is not a structural engineer it sends out a strong signal. This means the developers would have to go and get a structural engineer to design the building. This will help checkmate quackery.
However, Michael Scharpf, head of Sustainable Construction at LafargeHolcim gave a philosophical twist to the solution for building collapses in Nigeria. He argued that the key elements of quality design, materials and construction have been covered. Poor implementation and weak insurance compliance have also been discussed.
“Let me take a step backwards and ask a rather philosophical question. What constitutes the wealth of a society? Two elements, infrastructure of the built environment, which is important for business and living and the other element is knowledge, education,” Scharpf said.
These two elements are the hardware and software required to create massive wealth in a society. He said that the emphasis has logically been on the hardware which is necessary.
Nevertheless, “we need to talk about the software, the quality mindset, education, and training.
We have trained foremen on construction sites, masons, artisans and we have a strong mindset for health and safety,” Scharpf said.
This line of thought connects sustainability to decent lives, a social dimension. Skilled workers that have jobs and a decent living, live better lives. Their knowledge makes them adhere to building codes and avoid building collapses.
Onigbogi is optimistic though that the National Insurance Commission (NAICOM) is working round the clock to make bring building insurance to a level of national conversation through advocacy and implementation.
“Insurance is a risk mitigation device that decreases the liability of the insured when a loss occurs. It may not reduce building collapse per se but liability and aftermath of the collapse are better managed,” Onigbogi said.
There were 43 building collapse incidents in Nigeria in 2019, according to data compiled by the Building Collapse Prevention Guild (BCPG), an advocacy group of built environment professionals. The country’s biggest city, Lagos, saw the highest number of incidents, with 17 cases, just fewer than 40 percent of the year’s total. The next highest was Anambra State, with six collapsed buildings.
Previously, the BCPG warned that 36,000 building collapses were waiting to happen in Lagos alone.
The Nigerian Institute of Building (NIOB) called for government action, and for lessons to be learned from the Lekki Gardens building collapse in 2016, which killed 34 people, and the 2014 Synagogue Church collapse, in which 115 died.
Joseph Makoju, President, Cement Manufacturers Association of Nigerian (CMAN), said as cement makers members of the association attempt to follow their product to the end-users. This means after making a sale they follow up with the construction site. This is part of ensuring sustainability.
“We care about the impact our products have on society. Health and safety are important to our industry. Building collapse involves fatalities. We have zero-tolerance for fatalities,” Makoju said.
“Nigerian cement is ranked high around the world because we have high-quality raw materials.”
Professional bodies in the cement industry have also contributed towards maintaining global best practice standards on building sites in Nigeria.
For instance, the Cement Technology Institute of Nigeria (CTIN) established by the Federal Ministry of Industry Trade and Investment to which all cement makers belong continues to sustain training programmes for artisans.
The most recent set of graduands of CTIN had 3, 500 artisans.
Two years ago, the CTIN invested in a modern cement testing laboratory for the Standards Organisation of Nigeria (SON). This was out of a commitment to bring down the incidences of building collapse. Building collapses increased by 77 percent between 2010 and 2020, according to Makoju.
Fundamental to any solution that is to deal with building collapses is monitoring and evaluation of policies and recommendations. Clear measurable performance standards are required.
“We are also partnering with the government at various institutes for training to expand the network for training. We also introduced a new course in some schools such as at the Ilaro Polytechnic in Ogun State, to qualify people to technical levels for monitoring, and established more materials testing laboratories,” Makoju explained.
Farouk Salim, the director-general and CEO of the Standards Organisation of Nigeria said state governments are critical in ensuring the safety of building facilities.
“It is a high gain, little consequence business. People peddling substandard products make more profits than suffer consequences. I have been around for a while and have not seen an engineer, builder or developer that has been punished for breaking the rules,” Salim said.
Salim said when he was much younger, he heard stories of people wanting to build a 2-storey building on a 1-storey foundation and local authorities would object. But nowadays people attempt to make a 10-storey building from a 4-storey building foundation without consequences.
SON’s DG said it is important to return the organisation back to the ports. SON has been kept away from the ports but these substandard goods come through the ports. Some steel companies recently let in substandard materials into the country, “we found out and penalised them,” Salim said.
With the African Continental Free Trade Agreement (AfCFTA) if SON is not allowed into the ports and scanners are not brought in ports to check the items coming, Nigeria would have a big problem ahead.
The good news is that most of our local manufacturers such as Lafarge produce excellent products. Likewise, because of enforcement, the Nigerian electrical cable is of such a high standard that people are now faking it.