2023 National Insurance Conference: Expounding Essence Of Insurance Solutions For Public Buildings

By CLEMENT NWOJI, Abuja

     The saying that any community owned goat often die of hunger and starvation, no doubt, aptly underlies the essence of the forthcoming 2023 National Insurance Conference with the theme: “Redefining Safety – Insurance Solutions for Public Buildings and Buildings under Construction. It is against the backdrop of the prevailing careless dispositions of Nigerians, inclusive of political leaders towards government owned or public assets and properties, in this case that of public buildings and those still under construction that makes this theme even more appropriate now.

      This is of course, critical importance given the facts that the nation is currently undergoing what most experts perceive as self inflicted economic downturn as reflected in the nation’s socioeconomic indices. Thus, the need to collectively fashion out safety and insurance protection solutions to public buildings and those under construction scattered all over the country becomes invaluable.

      Going by the provisions of the Insurance Act 2003, Public buildings includes  “a tenement house, hostel, a building occupied by a tenant, lodger or licensee and any building to which members of the public have ingress and aggress for the purpose of obtaining educational or medical service, or for the purpose of recreation or transaction of business. The Act further makes it mandatory that “Every public building shall be insured with a registered insurer against the hazards of collapse, fire, earthquake, storm and flood.”
       Despite these provisions of the Act, it is very uncertain to what extent individuals, corporate organizations and government adhere strictly in compliance to the requirement of insuring the buildings, let alone paying the contractual premiums as at when due. The consequence in event of unexpected risk, is a lacuna of whom to lean on for recovery by the victims.

The Commissioner for Insurance (CFI)/Chief Executive Officer (CEO) of NAICOM, Mr. Sunday Thomas

NAICOM Considerations
    Therefore, the National Insurance Commission (NAICOM), the apex regulator of insurance, is certainly mindful of the colossal wastes and losses in terms of human lives and hard earned resources, incurred annually through building collapses, fire and other natural disasters which more often than not, involve public buildings. The collosal losses which runs into billions of Naira, are often due  to either non-insurance of such public buildings or non-compliance to insurance policy contract terms by the insured.

     These losses and wastes are even more devastating to victims of collapsed public buildings or those gutted by fire located at the three tiers of government without the relevant insurance coverage. The search for the best means to adequately indemnify victims, no doubt informed the resolve of NAICOM to classify public buildings under compulsory insurance to guarantee indemnity, compensation, minimize losses and wastage in any event of occurrence of the policy undertaken by the insured. Sadly, only few public buildings are with appropriate insurance policy cover. More worrisome, is that premium on the few insured public buildings are not paid as required. But as the rule stipulates in insurance practice that “No premium, no cover”, in event of the uncertainty insured against, the victims are left to their fate by the insurer due to breach of the policy contract.

     The Commissioner for Insurance (CFI)/Chief Executive Officer (CEO) of NAICOM, Mr. Sunday Thomas, explains the essence of the forthcoming 2023 National Insurance Conference, saying “We have chosen a theme that is of paramount importance to Nation Building, and pur collective prosperity – Redefining Safety – Insurance Solutions for Public Buildings and Buildings under Construction. Our aim is not merely to discuss but to usher in a new era of collaboration, one where insights are transformed into actionable strategies that redefine safety standards.” Further, the Commissioner for Insurance is very optimistic that the ideas and suggestions generated at the conference will be of immense relevance in shaping the future of insurance and stimulate socioeconomic development in Nigeria.  “Insurance is a key driver for economic growth and as NAICOM we continue to seek collaborative ways to grow the sector and enforce the the critical and compulsory insurance policies. From financial inclusion to new products development and market expansion, we believe insurance will accelerate Nigeria’s infrastructural and national development”, Mr. Thomas asserted.

    He cited the alarming rate of building collapses in Nigeria which underscores the urgent necessity of implementing comprehensive insurance for public buildings and buildings under construction. According to him, “These two types of insurance are part of the compulsory insurance policies of the National Insurance Commission (NAICOM),
that give succor to our people in the event of a building collapse or the occurrence of other risk factors.

    “So, as a nation, as landlords and building owners, as project managers and site builders, and users and workers within public buildings, we need to start taking these two insurance policies very seriously – The Public Building Insurance and the Insurance of Building under Construction. They can provide financial protection against such unforeseen disasters, enabling swift recovery, reconstruction, and the restoration of critical services. By insuring public buildings, Nigeria can safeguard its infrastructure investments, ensure the continuity of essential services, and promote a safer, more resilient environment for its citizens. This upcoming conference is bringing stakeholders together to forge a way forward to drive more awareness and compliance with the Public Building Insurance and the Insurance of Buildings under Construction.”

     Already, the conference scheduled between October 22-24, 2023 at the Abuja Continental Hotel (Old Sheraton) will host arrays of insurance professionals and other experts who had made indelible marks in their various fields of specialisation. While President Bola Tinubu is scheduled as the Special Guest of Honour, others to grace the event include: Governor of Lagos State, Babajide Sanwo-Olu, Guest Speaker; Minster of Finance, Olawale Edun, Chief Host; Chairman of Heirs Holdings & UBA Group, Tony Elumelu, Theme Paper Presenter & Speaker; The President of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), Johnbull Amayaebo, Speaker; Chief Executive Officer, FSD Africa, Mark Napier, Speaker; among others.

Public Buildings and The Insurance Act 2003  provisions
The Insurance Act 2003, Part XI Insurance of Property, Sections 64 to 66, explicitly provided as follows:
64. Insurance of building under construction. (1) 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.
(2) The duty to insure under subsection (1) of this section shall arise when a building is under construction.
(3) A person who contravenes subsection (1) of this section commits an offence and
on conviction shall be liable to a fine of N250,000 or imprisonment for three years or both.

65. Insurance of public buildings.
(1) Every public building shall be insured with a registered insurer against the hazards of collapse, fire, earthquake, storm and flood.
(2) “Public building”, in this section includes a tenement house, hostel, a building occupied by a tenant, lodger or licensee and any building to which members of the public have ingress and aggress for the purpose of obtaining educational or medical service, or for the purpose of recreation or transaction of business.
(3) The insurance policy under subsection (1) shall cover the legal liabilities of an owner or occupier of premises in respect of loss of or damage to property or bodily injury or death suffered by any user of the premises and third parties.
(4) 0.25 percent of the net premium received by every direct insurer on policies issued under subsection (1) of this section shall be paid quarterly by every insurer into a Fire Services Maintenance Fund which shall be established, administered and disbursed by the Commission for the purpose of providing grant or equipment to institutions engaged in fire fighting services.
(5) An insurer who defaults in making payment as required under subsection (4) of this section commits an offence and is liable on conviction to a fine ten times the amount payable provided that persistence in non-compliance with the provision shall be a ground for the cancellation of registration of an insurer.
(6) An occupier or owner of premises who is in default of this section commits an offence and is liable on conviction to a fine of not more than N100,000 or to imprisonment for one year or both.
(7) A person who intends to insure any other property located in Nigeria, whether movable or immovable, or any insurable interest or liability in relation thereto, shall place such an insurance with all insurers registered in accordance with this Act who may, subject to the provisions of this Act, reinsure such property or liability overseas where the Nigerian insurance industry lacks the capacity to retain the risk.
(8) A person who contravenes the provision of subsection (7) of this section commits an offence and is liable on conviction to a fine equivalent to ten times the amount of premium paid in respect of the policy.

66. Money insured on houses burnt, how to be applied
(1) Where a house or other building insured against loss by fire is damaged or destroyed by fire and there is no reasonable ground to suspect that the owner, occupier or
other person who insured the house or other building is guilty of fraud in respect of the insurance, or of wilfully causing the fire, the insurer who is liable to make good the loss may, on the request of any person entitled or interested in the insured house or building cause the insurance money payable to be paid out and expended as set out in subsection (2) of this section.
(2) The insurance money payable under subsection (1) of this section shall be paid out and expended towards rebuilding, reinstating or repairing of the house or other building so burnt down, damaged or destroyed by fire, unless-
(a) the party or parties claiming such insurance money shall within 60 days after the claim is agreed, give security to the satisfaction of the insurer that the insurance money shall be paid out and expended as stated herein; or
(b) the insurance money is, at the time, settled and disposed of and among all the parties entitled as the insurer may determine with the approval of the Court on the application of the insurer or any of the interested parties.
(3) Notwithstanding the provisions of subsection (1) of this section, the insurer shall have the right to elect whether to reinstate the house or building damaged or destroyed by fire, or to pay the insured for the loss suffered but not exceeding the insured sum.

What have been obtainable
     However, despite the provisions of the Insurance Act 2003, it is a common practice nationwide that most public buildings as well as those under construction are not insured at all. In any case, where any of the property is insured, the insurance policy would have elapsed due to breach of contractual agreements or just abandoned before  occurrence of the insured risk.

    There had been rampant building collapses just as there were incidents of fire outbreaks in public buildings. Statistics provided by the  Building Collapse Prevention Guild (BCPG) in August this year, showed that Nigeria witnessed a total of 553 building collapses between 1974 and ending on April 13, 2023. Also, it showed that  Lagos, the commercial hub of Nigeria led with over 326 buildings collapse in the last 49 years. This translates into Lagos accounting for 59.05 percent of the total 553 collapsed buildings within the time under review. The year 2022 is currently regarded as period with the highest number of collapsed buildings for having had 62 nationwide with Lagos accounting for 20 cases.

     Likewise,  the General Officer Commanding (GOC) 1 Division Nigerian Army, Maj.-Gen. Taoreed Lagbaja, was earlier this year quoted to have said that Nigeria recorded over 2,056 cases of fire incidents with a loss of over N1 trillion of properties in 2022. Lagbaja, represented by Brig.-Gen. Ogochukwu Ugeleka at
a fire prevention and management sensitisation seminar held at the Headquarters 1 Division Nigerian Army, Kaduna, cited further that available data indicated that domestic fire accounted for over 41 per cent of the total number of fire incidents in neighbouring Ghana.

Conclusion
     With the above staggering cases of collapsed buildings and fire incidents culminating in destruction of lives, properties as well as scarce resources, it is doubtful if all the public buildings affected had insurance coverage and the victims relatively compensated. It is therefore, on the basis of this that the forthcoming 2023 National Insurance Conference and its theme is of critical importance, not only to drum up supports for Compulsory insurance of buildings, but also to create the much needed awareness of the essence of insurance in general. This, certainly will in turn boost insurance contributions to the economic growth of the nation.