By ROSEMARY ONUOHA

All buildings are exposed to disasters like fire, collapse, earthquakes, storm or flood. However, if any of such disasters befall a public building; the loss that will emanate from such incident will definitely be massive compared to if a private building had been affected. Unfortunately, many public buildings have been affected by one or more of such disasters and property worth millions of naira were lost,  without any form of compensation to victims to recoup these losses. Unknown to many, the Occupiers Liability Insurance is compulsory for public buildings in the country to minimise losses from such disasters.

What is Occupiers Liability Insurance?

This is a type of insurance that all owners or occupiers of public buildings, whether private or public, are required to provide under the National Insurance Act 2003 and the Lagos State Building Control Law 2010. A public building is any building that is not 100 per cent used by the owner for residential purposes according to the Nigeria Insurance Act 2003. Public buildings include tenement houses, hostels, residential buildings occupied by tenants, lodgers or licensees, and any other building to which members of the public enter and exit for the purpose of educational, recreational or medical services (e.g. schools, cinemas, hospitals, malls, petrol stations, etc).

Occupiers Liability Insurance provides compensation in events of bodily injury, death and property damage to the business users and members of the public in case of building collapse, fire, earthquakes, storm or flood. The penalty for non-compliance is N100,000 plus one year imprisonment, and sealing-off or demolition of the building under the federal and the Lagos State laws.

The role of insurance

The primary and traditional role of insurance is to provide financial relief to insured victims who have suffered losses due to the consequences of uncertainties such as fire, flood or quake. Losses resulting from collapsed buildings either at the stage of construction or occupation bring physical sorrows, fears and pains resulting from outright loss of property and valuables. Unfortunately, the public are not taking advantage of the compulsory policy to protect themselves against unexpected risks. Due to the economic implications of these losses, insurers believe the ideal alternative is for Nigerians to buy insurance policy and transfer the burden to the insurers, who are the professional risk bearers.

In recognition of this losses and to check this menace, Section 65 of the 2003 Insurance Act provided for   Occupiers Liability Insurance policy,   which stipulates that all business and office premises (government, corporate, and   private), guest houses, hostels and residential estates, must take this compulsory policy cover for protection. According to insurance experts, this would surely ease the burden of government   in mitigating these losses, since   insurance is a social device providing   financial compensation to cushion the effect of unexpected   misfortune, adding   that where adequate occupiers liability insurance policy exists, property destroyed by fire, for instance,  can be reinstated with minimum delay.

Former President of the Nigerian Council of Registered Insurance Brokers, NCRIB, Mr. Ayodapo Shoderu said,  “This is why the economy is not growing. Insurance is the last hope of any human kind. If a loss occurs and insurance has been purchased, it puts the individual in better stead as if no loss was incurred. But where no insurance has been purchased, it causes a reduction to wealth by the amount of value of those insurable assets.”

Group Managing Director of Mutual Benefits Assurance Plc, Mr. Akin Ogunbiyi, said that a large percentage of Nigerians are not aware of these insurances, as well as the advantage and benefits that they will get from insuring their  property. Managing Director/CEO of Staco Insurance Plc, Mr. Sakiru Oyefeso, lamented that many of the property destroyed by fire, wind storm, flood, etc do not buy insurance to protect themselves.   He attributed it to lack of awareness and general apathy about insurance generally. According to him, any country that really wants to develop and grow must take insurance business seriously because it is the engine room for any economic progress.