Incidence of riots, violence, and insecurity are becoming part and parcel of us and everyday occurrence for that matter, with its negative impacts on lives and properties.
Maybe nobody has paid attention to this, but this has become more popular than ever since the #ENDSARS protest in 2020, when it became obvious that the masses, particularly the youths are overstretched and could go any limit to demand for their rights.
The reasons for the social unrest are obvious and may not likely be over soon, as government have appeared helpless and clueless on how to solve these problem, as kidnapping, killings, banditry and riots have continued in almost every part of the country unabated.
These means so much for the government and the economy as whole, but also mean an opportunity for the insurance industry to rise up to the challenge and support the society with some risks management mechanisms.
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Therefore, understanding the potential for violence and adjusting plans, procedures and resources during such period will help mitigate risks and lay the groundwork for responding to emergencies when they arise.
Insurance experts note that life and property insurance ordinarily does not cover riot or violence, stating that these accounts for why many are not able to make claims when properties are destroyed as result of riot.
But Kola Ahmed, an insurance broker and former director general of the Chartered Insurance Institute of Nigeria (CIIN) had stated that what brokers who manage clients have done over time is to request for an extension for property and fire policy to include cover for riot and violence.
What this means, he noted is that the insured would have to pay extra premium to get cover extension against these extensions.
Ahmed noted that in advanced economies like the UK, it is usually the responsibility of government to pay compensation for damages as result of riot.
“In the UK, we have what is called Riot Damage (Compensation) Act, which makes provision for insurers to recover their loss if they pay claims to insured on damages due to riot.”
According to Ahmed, such policy is not here in Nigeria and that is why insurance companies are reluctant to give cover for riot.
Chika Onwunali, managing consultant, Premium Debate also noted that loss from riot could be huge and capable of wiping out a whole insurance company.
“It is usually the responsibility of government to pay for premium on riot and political violence and it is taken as subsidy to insurance. Unfortunately it is not available in Nigeria, which is why most violence is not insured.”
