Despite many professionals, insurance law, cases of building collapse increase

There are rising cases of building collapse across the country, especially in Lagos State, the commercial hub of Nigeria.  This is seen as embarrassing to a country that boasts of high-level professionals in the building industry. This has also raised questions on the benefits of the compulsory insurance in Nigeria — by law, any building under construction above two floors, as well as public buildings in the country, must be insured. 

Interestingly, most of the buildings that have collapsed are from two floors and more. They were supposed to have been insured but were not, and the developers have not been prosecuted for violating the law.

The recent collapse of a 21-storey building under construction in Ikoyi, Lagos, which left at least 45 people dead, including the developer, and many others with various degrees of injury, threw the entire country into frenzy. Worse still, the multibillion-naira building had no insurance. Directors of the company have also not been charged to court for any infraction. 

Again, in less than two weeks after the Ikoyi building collapse, another one caved in at Sunny Filled, Flour Mills Estate, Magbon, Badagry, also in Lagos, with four fatalities.

One of the most disastrous building collapses Nigeria recorded was that of the guest house of the Synagogue Church of All Nations in 2014, which killed at least 115 people. It is not clear if that public building was insured as the law demands. 

Data released by building professionals under the auspices of the Building Collapse Prevention Guild showed that in 2019 alone, “Nigeria recorded not less than 43 cases of building collapse; and Lagos had the highest figure, with 17 cases, accounting for 39.53 per cent of the total number of such buildings.”

Based on their records, Anambra State had the second-highest number, with six, while Plateau and Delta states recorded three collapsed buildings each. Oyo, Enugu, Ondo and Osun states recorded two collapsed buildings each in 2019, while Imo, Kwara Abia, Adamawa and Katsina states had one incident each.

In Abuja, the Federal Capital Territory (FCT), an ICIR report indicated that between 2011 and 2012, five cases of building collapse were recorded at Jabi, Garki, Mpape, Mararaba and Gwarinpa estate. Also, at least 49 deaths were recorded in Abuja between 2008 and 2018.

Section 65 of the insurance act, 2003 prescribes that all public buildings shall be adequately insured.  A public building is defined as one that is non-residential and accessible to the general public. Buildings such as schools, churches, mosques, hotels, town halls, shopping malls, office buildings (public and private), markets and so on, fall in this category.  

A builder’s risk insurance is a special type of property insurance that mitigates risks against damage to buildings and the workers while they are under construction. The protection covers a person or organisation’s insurable interest in materials used in the construction site, provides coverage for damage done to the insured structure from a wide variety of events. Damage from the following events will be covered by most policies; example wind (which may be limited to coastal areas), collapse, fire and theft of materials, lighting, hails, explosion and vandalism, depending on the extensions sought and covered. 

For now, it is the National Insurance Commission (NAICOM) that is saddled with the responsibility of enforcing the provisions of the compulsory insurances. But that hasn’t happened due to the limitations of the law that hasn’t given it the express powers to prosecute offenders. For instance, punishment for non-compliance with this provision is stated as either a fine of N100,000 and/or imprisonment of one year, but silent on how the provisions should be enforced.

Many stakeholders have expressed dismay over these limitations and have called for an amendment to the NAICOM act to give them the power to prosecute violators of insurance laws. 

A bill is in the National Assembly to this effect, but it is uncertain if it would turn into law before its lifespan lapses in 2023. 

But the NAICOM has made some efforts to sensitise the public and the government on the benefits of building insurance. It has also partnered with some government agencies on enforcement, but such efforts haven’t yielded significant results, at least for now. 

 In October 2017, the NAICOM inaugurated a technical committee that would drive the enforcement of public building insurance in Nigeria. In 2020, the commission also launched the compulsory insurance in the six geopolitical zones of the country, but not much has been achieved. 

Experts said that when Nigerian buildings are insured and insurers begin to do due diligence and ensure that specified standards are met during construction, building collapse would be reduced significantly.

At a recent retreat for insurance correspondents, organised by the Insurance Industry Consultative Council (IICC), the issue of building collapse and compulsory insurance was discussed, with participants expressing disgust over the low level of building insurance in Nigeria. 

Sir Muftau O. Oyegunle, chairman of the IICC, said, “The recent collapse of a 21-storey building at Gerald Road, Ikoyi, Lagos, exposed the level of decadence in our society. It simply revealed the level of culture of ‘settlement’ in our country.”

Oyegunle, who is also the president of the Chartered Insurance Institute of Nigeria (CIIN), also called for the immediate enforcement of compulsory building insurances, and charged states, especially Lagos, which has domesticated the compulsory insurance, to enforce it without further delay. 

Also commenting, Casmir Azubuike, the managing director of Afriglobal Insurance Brokers Limited, agreed that compulsory insurance should be enforced so that in the event of a building collapse or fire, the owners and third parties would have some form of benefits. 

He said it was unfortunate that the Ikoyi building was not insured, adding that those who lost their lives may not get any compensation. 

He added that government must rise to its responsibility to enforce building insurance in Nigeria. 

Speaking recently on TVC programme on the spate of collapsed buildings and insurance, the commissioner for insurance in Lagos State, Mr Olorundare Sunday Thomas, said the incident was a national tragedy. He called for an intensive sensitisation by insurance operators, the regulator and government on the benefits of insuring buildings under construction, and public buildings. 

He noted that the Lagos State Government had been spending hugely on compensation to victims of building collapse, thus needed to enforce the compulsory building insurance law to mitigate expenses. 

Also, the president of the Nigerian Council of Registered Insurance Brokers (NCRIB), Mr Rotimi Edu, in a statement on the Ikoyi building, noted that government and other stakeholders must wake up and insist on insurance. 

He called on relevant authorities to synergise to ensure compliance with building regulations.

Time will tell if the call for enforcement of the compulsory insurance on buildings would be implemented.

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