By Patience Saghana
Insurance companies in the country may begin to reap the fruits of Sections 64 and 65 on public building and building under construction with the signing of building law .

The Lagos State building law came at the time when the National Insurance Commission (NAICOM) started the campaign on compulsory insurance around the country which includes public buildings and buildings under construction.

Section 64(1) of the 2003 Insurance Act states, “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 or damage to property of any workman on the site or of any member of the public.

“The duty to insure under subsection (1) of this section shall arise when a building is under construction.

“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.”

Section 65(1) of the Act states, “Every public building shall be insured with a registered insurer against the hazards of collapse, fire, earthquake, storm and flood.”

“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.

“The insurance policy under this 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.”

Mr. Babatunde Fashola (SAN), Lagos State Governor, last week Monday signed a law to provide for the administration of Physical Planning, Urban Development, Urban Regeneration and Building Control with an appeal to Lagos residents to embrace the law  in order to save lives.

Fashola said that the involvement of insurance companies in the construction of buildings would also open avenues for more job opportunities for graduates of insurance as well as insurance firms who will in turn employ more people, adding, “By working with the private sector, building control compliance will be easier”.

The law also insists that every building development during the process of its undertaking must carry its contractor’s all risk insurance “not only for the safety of the men and women who work on the site but also as a strategy to ensure that there is private sector involvement here”.

Mr. Tom Imokhai, Managing Director, Standard Alliance Insurance Plc commended the effort of the Lagos State Government. He said, It’s a bold step to enforce the compulsory Builders’ Liability Insurance Policy through the Building Control Bill it signed into law last week Monday.”

According to him, “The law which henceforth makes it mandatory for a developer of a three-storey building and above to provide insurance certificate as a pre-requisite for government’s approval was a welcome development to the insurance sector as “it would mean good business for the general underwriting companies in the state if compliance was fully pursued.”

“We in the sector have been expecting this supportive bold move by all state governors and the Minister of the Federal Capital Territory to give bite to the efforts of the Commissioner for Insurance. With this bold move by the Lagos Government, we hope that other states and FCT would follow,” he said.

“There are a lot of such building projects going on at different sites on the Lagos and Abuja corridors in particular as well as other states of the federation. We need this sort of backing to force builders to comply with securing such appropriate building insurance covers.”

Mr. Ademayowa Adeduro, Managing Director, Anchor Insurance Company Limited said that the Act was a laudable one, which would give relief to victims of building disasters and help in standardisation of buildings because insurers would ensure that the buildings insured were in good conditions.

Adeduro did  observe that some challenges that might arise in its implementation included inappropriate pricing by insurance companies in order to insure more buildings.

At this juncure, he said that operators had to sit down together and determine what should be the appropriate rate for buildings in different neighbourhoods and buildings under construction.

He said that it was a challenge for stakeholders; the industry practitioners, umbrella and supervisory bodies, and fire service organisations, because they had a benefit in it as certain percentage of the income would go to the fire service to enhance its operations and enable it combat incidents of fire and collapsed buildings.