There are strong indications that the recently collapsed 21-storey building in Ikoyi, Lagos, has no insurance coverage, LEADERSHIP investigation revealed. As of yesterday, insurance operators under the auspices of the Nigerian Insurers Association (NIA) as well as the insurance brokerage fraternity, that is, the Nigerian Council of Registered Insurance Brokers (NCRIB) were still searching for the likely insurer of the building, but to no avail.
NIA is a body of 58 insurance and reinsurance companies in the country while NCRIB is a council of about 500 insurance brokers across the federation. Although, building insurance is part of the requirements for documentation and approval to construct such an edifice, insider sources said the contractors have little regard for insurance coverage, seeing the cover as a waste of money.
For a building of this magnitude, industry source disclosed that the premium for All-Risks Construction Liability Insurance coverage is about one per cent of the entire building project, which invariably means the premium the owner of this building could have paid is about N500 million or less. The premium, if paid, could have covered that cost of rebuilding the collapsed structure, compensation for the third parties involved, including families of the deceased victims as well as the other properties affected by the disaster.
However, without insurance, it puts pressure on Lagos State government to cough out fund by all means to compensate the families of the victims from the purse of the state, which ordinarily should not have been so had the project been insured. Similarly, the collapsed building whose contractor was Fourscour Heights Limited also had two other towers within the premises of the collapsed building, although the two towers are within the range of 16 floors. Sources, however, indicated that there is a high chance that the other two buildings may not have been insured as well. Efforts to trace the contractor for reaction were unsuccessful as there was nobody linked to the contracting company, aside the deceased boss.
Effort to contact the company through its website failed as the company was not registered with any known website. And with a judicial panel set up by Lagos State government on the issue, the Lagos State Building Control Agency (LASBCA) is reluctant to speak on the issue until the panel finishes its findings. Reacting to this development, the chairman of NIA, Ganiyu Musa, yesterday said, “As of today, no insurer has notified the association of its involvement in the provision of insurance to the building.”
Noting that the association had, last week, put in place an enquiry mechanism to ascertain whether members underwrote the building, he added that no member company had come up to state that it provided cover for the building from then till now. Similarly, the executive secretary of the Nigerian Council of Registered Insurance Brokers (NCRIB), Tope Adaramola, disclosed that no broker had so far notified the council of its involvement in the building project. He implored Nigerians to cultivate the mindset of embracing insurance which, he said, remains the best tool to mitigate risks. In an exclusive interview with LEADERSHIP yesterday, the managing director/CEO, Universal Insurance Plc, Ben Ujoatuonu, said beyond the fact that there is a requirement for compulsory insurance, Contractor All-risks Liability Insurance would have covered all that happened.
The magnitude of the project, he said, requires that there should be Contractors All-risks Insurance in place which the principal ought to have required from the contractor that was erecting the fallen structure. “Contractors All-Risks would have covered the contract works, which are the building itself and third party liabilities. You see that lots of people and adjoining properties were affected. All these things are covers that could have been provided by Contractors All-risk Liability Insurance. It is amazing this thing is happening. It also calls for the need for insurance in our daily lives. Nobody knows when it’s going to happen and how it will happen,” he said.
Stating that accidents such as this could happen, which is why there is the need for insurance, he urged everyone undertaking any venture to buy the necessary and adequate insurance to provide cover against losses. “This should be an eye opener for Nigerians to procure the needed coverage, not only for themselves, but for third party liabilities as well. It is going to be humongous, economic and accidental loss of wealth because when government begins to talk about compensation to the families, government is going to divert fund that is meant to be used for other developmental purposes into compensation and that is what insurance would have taken care of,“ he pointed out. On pricing for such risk, he said: “Insurance is the cheapest service you can buy. Considering the nature of that construction, I can tell you that if Contractors All risk had been taken on that project, the contract work cannot be up to one per cent of the entire project value. So, how much is one per cent in terms of premium that will be able to take care of that level of liability or loss?”
In an interview with LEADERSHIP yesterday, the managing director/CEO, Niger Insurance Plc, Edwin Igbiti, said a such huge project ought to have been insured, adding that had it be insured, there will be no need for state government to intervene in the compensation of the families of those affected by the loss. “If Contractors All Risks Liability had been subscribed to, insurance companies involved would have compensated the families of the diseased and all third parties involved as well as reconstruction of the collapsed buildings instead of putting this liability on government. This kind of emergency is also a burden on the government because it is not a liability it envisaged and made provision for in the budget,” he pointed out.
He urged all contractors handling building projects to take Contractors All-risk liability as there are lots of risks involved in constructing high-rise buildings. The Nigerian Insurers Association (NIA), while earlier commiserating with the families of deceased victims, warned owners of public buildings to desist from the act of constructing high-rise buildings without the regulatory building insurance coverage. Building without building insurance coverage, according to NIA, means violation of the insurance law. While observing the worrisome recurrence of building collapse in the country, the director general, NIA, Yetunde Ilor, emphasised the need for the general public to comply with all building rules and adopt insurance in the protection of lives and property to curb further incidences of building collapse. Ilori called on stakeholders in the built environment to arrest the rising occurrences of building collapse by ensuring strict adherence to standards, adding that the nation had lost so much to the carelessness of a few unpatriotic builders.
The NIA DG assured the insuring public of the industry’s capacity and readiness to respond to the needs of Nigerians through the provision of insurance protection to the citizens. According to the country’s statutory laws, Section 65 of the Insurance Act 2003 stipulates that all public buildings shall be adequately insured, while Section 64 of the Act provides that all buildings under construction above two floors shall be adequately insured with a registered insurance company. The law explains further that every public building should be insured against the hazards of collapse, fire, earthquake, storm and flood.
About 43 people was said to have died from the recent tragic collapse of the 21-storey building at Gerard Road, Ikoyi, Lagos. It was learnt that Femi Osibona, the developer of the 21-storey building who also died in the tragic incident in Ikoyi area of Lagos, ignored a directive by the Lagos State Physical Planning Permit Authority, LAPPPA, to insure the structure. It was gathered that the developer was directed to insure the liabilities associated with construction of the building.
According to the development permit no-DCB/D O/2442I V, dated 09/04/2019, the late Osibona was duly directed by the Lagos State government to insure the construction risks of the building but he apparently did not, and found a way to continue with the project without the authorities stopping him. The government has already suspended the general manager of the Lagos State Building Control Agency, LASBCA, Mr. Gbolahan Oki, an architect and instituted an enquiry into the incident.
Part G of the permit reads: “A developer of any building above two floors shall insure his/ her liability in respect of construction risks and submit a Certified True Copy, CTC, of such insurance policy certification with his/ her development permit to Lagos State Building Control Agency, LASBCA.” Similarly, Part E said: “Non-compliance with the approved planning permit as designed will void the permit, and the development will be regarded as illegal.”
