Hope for collapsed building victims as insurance Bill scales 2nd reading

If the Bill currently before the Senate seeking to make compulsory the insurance of public buildings and buildings under construction, which has scaled second reading survives, victims of collapsed buildings across Nigeria would be adequately compensated.

This is also expected to enhance the fortune and revenue base of insurance in Nigeria, and subsequently enhance the contribution of the industry to the nation’s gross domestic product (GDP).

The Federal Government through the Insurance Act 2003 made it compulsory for all buildings used by third parties to be insured against the risks of collapse, fire, earthquakes, storm or flood such that in the event of any of these risks crystallising, adequate compensation would be paid to both victims and families of those who may lose their lives.

Industry regulator, the National Insurance Commission (NAICOM) through several efforts had pushed the enforcement of this section of the Act with not much success, as owners of public buildings and buildings under construction have remained adamant with a lot of loss of human lives and properties recorded at intervals.

This is despite the fact that the non-compliance with this compulsory insurance attracts a penalty of N100,000 or one year imprisonment or both, as provided in the 2003 Insurance Act.

The industry through NAICOM had anticipated that the full implementation of these compulsory building insurances alongside other compulsory products, including Motor Third Party, healthcare professional indemnity and group life insurance, would push the industry annual premium to N1 trillion, as against N490 billion currently generated. But this remained a mirage.

But hope is on the rise again with the Insurance Act (Amendment) Bill 2021 being sponsored by Ibikunle Amosun, representing Ogun Central, which on Wednesday, March 10, scaled second reading.

Amosun said, “The need for the amendment of this Bill was necessitated by the prevalence of collapsed buildings in many Nigerian cities, which has led to the unquantifiable loss of lives and property as well as permanent disability.

“There has been an increase in the cases of collapsed buildings in the country, most especially in the last 10 years.”

He recalled that a three-storey residential/school building on Massey Street, Ita Faaji area of Lagos Island collapsed in March 2019, resulted in the loss of 20 lives with 43 injured; while another under construction located at No 9 Ezenwa Street, Onitsha, left no fewer than six persons dead.

According to Amosun, the Lekki building collapse that occurred on Tuesday, March 2016, resulted in the death of no fewer than 34 persons and injuring several others; and a six-storey guest house belonging to a church in the Ikotun area of Lagos on September 2014 collapsed, trapping about 300 people out of which over 100 were said to have lost their lives.

Furthermore, he added that the Umuahia Building collapse in May 2013, witnessed a building under construction in the Agbama area of Umuahi, Abia State, claiming about seven lives; and the Abu Naima Primary and Secondary School, Bukuru, Jos South Local Government Area of Plateau State in September 2013, resulted in the death of 10 pupils mostly under 10 years.

He also recounted that the building in Abuja (August 2010) – a four-storey uncompleted located on Ikoli Street, off Gimbiya Street, Area 11, Garki, collapsed leading to the deaths of 21 persons and injuring many more; and the collapse of the Titanic Building at Ebute Meta on July 2006, with a block of 36 flats housing an estimated 180 people collapsed leading to the deaths of 20 people.

“These cases and several others, too numerous to mention, are considered as some of the worst incidences of a collapsed building in Nigeria, in recent times. The need to checkmate the rising cases prompted the urgent need to amend the Insurance Act.

“Mr President, distinguished colleagues, this Bill is proposed to ensure compliance with the compulsory insurance of public buildings and buildings under construction by relevant stakeholders in Nigeria, thereby addressing the limitations of the current law particularly in respect of inadequate penalty against any persons, group of persons or entity liable for building collapse and non-existing provision on the minimum sum to be insured for a building under construction.

“In a nutshell, the bill seeks to address the following: Provide security as a remedy for victims of collapsed buildings; fill the gap in the failure to provide for a limit of liability in respect of third-party liability in compulsory insurance of public buildings under construction; provide adequate penalty provisions in line with current socio-economic realities for contravention of the law and restore the glory of the insurance industry, which is characterised by gaps in addressing the multiple risks in the construction industry,” he said.

Meanwhile, the Senate president, Ahmad Lawan, has referred the bill after it scaled second reading to the Committee on Banking, Insurance and Other Financial Institutions for further legislative work. The Committee, chaired by Uba Sani (APC, Kaduna Central), is expected to report back in four weeks.