Need for insurance as building collapse takes tall on families, government

Building collapse in our environment today has become so rampant that it has become costly not taking any form of insurance protection or the other.

The outgoing year 2019 was remarkable in terms of incidences of building collapse with consequent losses of life and properties, and the unnecessary involvement and distraction of government when such incidents happen.    

 

Across the country particularly Lagos, the story is the same both in occupier buildings and building under construction.

In certain cases, more floors were being added to the existing floors (possibly without appropriate approvals) and without consideration for the structural strength or quality of the initial foundation, say’s Funmi Babington-Ashaye, managing director/CEO, Risk Analysts Insurance Brokers Ltd in one of her recent article on ‘Spate of building collapse and what insurance can do’.

 

She stated that the regularity, huge loss of human lives and property as well as the adverse impact of these incidents call for serious introspection and greater care by landlords, property developers, professionals and regulatory agencies in the building industry. 

She said it is time for more regulatory activism in this sector. “The weight of the law should be brought to bear on culprits of non-compliance to laws, regulations and standards. It is time for greater premium to be attached to the lives of Nigerians.”

Babington-Ashaye stated that despite these precautionary measures, risks are still there, underscoring the need for adequate insurance for public buildings as well as contractor all risks for building under construction.

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Unfortunately, the insurance industry is sitting on billions of naira that is yet to be exploited. The ‘sleeping fortune’ is on taking advantage of building insurance made effective in the Insurance Act 2003, as a compulsory policy to take care of occupiers liability in the event of accident. Its impact analysts have said, is capable of generating several billion naira premiums annually if implemented.

 

Section 64 of the Insurance Act 2003 provides that “No person shall cause to be constructed any building of more than two floors without insuring with a registered insurer his liability in respect of construction risks caused by his negligence or the negligence of his servants, agents or consultants which may result in bodily injury or loss of life to or damage to property of any workman on the site or of any member of the public.

A person who contravenes the provision of this law commits an offence and on conviction shall be liable to a fine of N250, 000 or imprisonment for three years or both.

While section 65 of the Insurance Act stipulates that “Every public building shall be insured with a registered insurer against the hazards of collapse, fire, earthquake, storm and flood. The penalty for non-compliance with this occupier’s liability insurance is N100, 000 or one year imprisonment or both.

 

National Insurance Commission (NAICOM) through its Market Development and Restructuring Initiative (MDRI) to enforcing these compulsory insurances in Nigeria, which occupier’s liability insurance of public buildings and building under construction above two floors fall into.

 

However, like many other areas of insurance which remained crawling as a result of reasons including low awareness, apathy and most importantly,  operators’ inability to take proactive steps on implementation, this goldmine has largely remained a dream.

While, the operators themselves have unanimously agreed that the regulator is conceivably doing what it is suppose to do in terms of creating awareness having launched in the six geopolitical zones of the country, it is left for the operators to step up action and sell the product.