With the continuous building collapse across the country, and most recently, in Oyo and Lagos states, there is a need for owners of public buildings to insure their houses in order to avert collateral loss. ZAKA ABD-KHALIQ writes.
Building collapse is a nightmare to the victims, especially, the occupants and owners of the collapsed house.
This has resulted to loss of lives and properties worth millions of naira, with no adequate plans for compensation.
For the unlucky ones, they pay the price with their lives while their immediate families wallow in penury. For the building owner, popularly known as landlord, he would loose a multi-million naira investment that may never be recouped in his lifetime.
However, all these sufferings could have been prevented or at least, limited with adequate building insurance cover sold at a paltry premium.
But Nigerians are a special species who rely so much on God for virtually everything, including, protection. They believe that the God that giveth them life must also protect them and all their properties. Because of this mindset, insurance is an alien product. That is also the reason the country has only 0.04 per cent insurance penetration.
Can you imagine building a mansion at the cost of N300 million and above and the owner failed to insure the structure with a paltry N750,000 annual building insurance premium?
This is exactly the scenario that continues to play itself on a regular basis in Nigeria.
While government at the federal and state levels continued to pay lip service to insurance of their respective buildings, landlords in the private sector also have no regards for insurance.
Hence, owners of public buildings failed to insure them despite the fact that they are covered under the Public Building Liability Insurance Act – section 65 of the Insurance Act 2003.
And at any point in time when there is a building collapse, the owners and occupants would always want to rely on government to compensate them from the scarce resources of the state. Though, on few occasions, they might be compensated but the value of compensation could barely erect 100 blocks, thereby making such compensation meagre.
But with insurance, the victims of such building would be compensated while the insurer would also rebuild the house, which is the beauty of insurance.
Regretably, Nigerians wait for disaster to happen first, when they could have been proactive to insure their buildings earlier.
The insurance industry, to this regard loses trillions of naira to non-insurance of these buildings in the last ten years.
Recent Building Collapse
In recent times, several buildings had collapsed across the states of the federation with several casualties.
Barely 72 hours after a three-storey building collapsed in Ita Faji area, Lagos Island, where 20 people, including children died and several others injured on March 13, 2019, another building collapsed in Ibadan, Oyo State. The incident occurred in Bode area, after Molete Bridge, of Ibadan on March 15, 2019.
A 7-storey building under construction along Woji road in the Government Reserved Area (GRA) of Port Harcourt, the Rivers state capital collapsed in December, 2018, where about 60 persons were said to be at the site when it collapsed, leaving about 18 dead, while the remaining ones were rescued alive.
LEADERSHIP investigation revealed that of all the aforementioned collapses, none of the state government financially compensated the victims, aside the condolence messages the concerned governors sent to the victims. They were all left to their fate.
The Public Building Liability Insurance Act makes it obligatory for all public buildings to be insured with a registered insurer, by their owners, against the dangers of collapse, fire, earthquake, storm and flood. The insurance policy also covers the legal liabilities of an owner or occupier of premises as regards to loss of or damage to property, bodily injury or death suffered by any user of the premises and third parties, also known as Occupier’s Liability Insurance.
Defaulters of this directive would be committing an offence and are liable on conviction to a fine of not more than N100, 000 or imprisonment for one year, or both.
But with virtually nobody prosecuted in the past for violating this provision, more violators are springing up on a daily basis, thereby, putting the lives of occupants of such buildings at risk.
Insurance To The Rescue
Following recent building collapse in Lagos and Oyo State as well as other similar disasters, the President, Nigerian Council of Registered Insurance Brokers(NCRIB), Mr. Shola Tinubu, said his association is quite touched, believing that the unfortunate incidences are actually accentuated greatly by the lax of regulatory enforcement in the construction environment.
To combat this, he said, government needed to be more proactive in implementing building laws, even as they have continuously engaged stakeholders in the built environment and related institutions to elicit their input for a long lasting solution to the malaise.
While the council commiserated with the victims of the building collapse, he charged government to give more impetus to the implementation of the enforcement of compulsory building insurance as enshrined in Section 64 and Section 65 of Insurance Act 2003.
Similarly, he advised Nigerians to insure their personal assets in order to mitigate losses in case of any structural failure. “Every individual should ideally live up to his responsibility of care by protecting whatever is valuable to him or her, both life and property. Our slogan has been :”Whatever is worth having, is worth insuring,” he pointed out.
Earlier, Sunu Assurance Nigeria Plc sympathised with the Lagos state government and the families of victims of the tragic building collapse which took place on March 14th 2019 at Ita Faji area of Lagos Island.
To this end, the insurer called on government to enforce insurance of public buildings in a bid to compensate the victims and owners of such buildings when mishap occurs.
“This is why we would like to implore the government to look into the issue of public safety in its entirety and enforce the insurance of every public buildings,” it pointed out.
On implementation of this insurance, the commissioner for insurance, Alhaji Mohammed Kari, said, the National Insurance Commission(NAICOM) needed to sign a Memorandum of Understanding (MoU) with state governments in a bid to use the state apparatus such as environmental sanitisation board, revenue generation board, fire brigade, among others to enforce building insurance and prosecute violators.
The fire brigade, he said, is empowered by law to enforce building insurance, and the agency alongside the State Inland Revenue are expected to be visiting organisations, offices, shops, filling stations and houses to request for their insurances.
Such enforcement, he pointed out, would also generate employment for the adopting states, while transferring the burden of compensating the victims of building collapse from the government to the insurance companies. This, he said, would allow the government to focus more on developmental projects, rather than looking for money from the little resources of the state to settle victims.
Owners and Occupiers of such buildings, according to him, would equally be returned back to the financial position they were before the collapse, saying, ‘this is the beauty of insurance’.
Similarly, the managing director/CEO, Guinea Insurance Plc, Mr. Tunde Oshadiya, said Insurers must let people know the benefits of insurance policies they are carrying, stressing that Insurance of public building is compulsory by law. Tenants, he said, should make it a priority to ensure that the house they want to rent is insured by their landlords.
According to him, “One of the cheapest thing you can buy is insurance. For instance, you can insure a N10 million house with N25,000 premium. Most policyholders did not know that the Fire Insurance policy they have covers flood, or when wind blow-off your rooftop. All these need to be explained to policy holders by marketers to ensure that customers maximize their cover.”
To settle a claim, he said, it should not take more than five days maximum , but that when a claimant failed to submit the required documents on time, it would prolong the claims beyond payment period.
“Delayed documentation on the part of policy holders is a challenge to timely claims payment. Claims should not take more than 5 days and there are underwriters paying within that timeframe. But when death is involved, you find it difficult to get police report on time, thereby, delaying the claim process. Moreover, some customers do report late, or fail to provide the documents required of them by their insurers on time,” he pointed out.
While building contractors of most of the collapse buildings, either the ones under construction or occupant buildings, have been found to have compromised quality, subscription to building insurance would have exposed these dubious contractors as the insurers concerned would have done their investigation before insuring such buildings.
Market observers called on government to ensure insurance of all its buildings to serve as a good example to other building owners.
Pleading for enforcement of Public Building Liability Insurance, experts called on all relevant enforcement agencies to punish those who violates building insurance.
Moreover, insurance operators are enjoined to increase awareness on building insurance so that Nigerians could understand the advantages of insuring their building.
Stakeholders are canvassing for more awareness on building insurance so that owners of public buildings are aware of the gains of this cover and adequately guard against it through subscription to building insurance, with multiplier effect on the growth of Gross Premium income of the insurance industry.