Barring any further hitches, the implementation of the 2003 Insurance Act that came into force recently may soon be kick-started by the insurance regulatory body, following a fresh effort to woo professional bodies in the building industry to back the implementation of the scheme within the construction sector.
Professional bodies in the built environment had in different forums criticised the law, claiming ignorance of its modalities to implement the mandatory insurance scheme. For instance, members of the Nigerian Institution of Estate Surveyors and Valuers alleged that their professional body was not carried along in the making of the law and sought for a review of the Act.
But at the 3rd “Yearly Distinguished Lecture”, organised by the Nigerian Institute of Quantity Surveyors (NIQS) Lagos Chapter, in conjunction with the Union Assurance Company Limited, held last week at the Nigerian Institute of International Affairs (NIIA), Victoria Island, Lagos, experts believe that its implementation is capable of wiping unqualified operators out of system.
The lecture essentially focused on workability of the impending enforcement of the Act in a way that stakeholders in the building sector would not only embrace it, but also not run foul of its violation.
It would be recalled that the essence of the Act is to ensure that whoever that suffer loss, either of live or property, or sustain injury would not be left at the mercies of kind hearted people or philanthropists, but that there should be a legal instrument to seek redress, especially, if such loss is as a result of negligence from either the owner of the property, the contractor, the developer, or any other concerned stakeholder. And to properly address this situation is the insurance sector.
For example, it was discovered that absence of uniform building construction legislation, poor housing delivery, inefficient town planning departments are all contributing to the disturbing development of loss of live and properties.
Speaking on theme: “Insurance Act 2003 and the Construction sector: Providing the right cover for the mandatory risks,” the NIQS President, Mr. Agele Alufohai, noted that there is a nexus between the insurance sector and building industry.
According to Alufohai, with appropriate policy, both industry will grow and influence Nigeria’s economy to be one of the largest in 20:20:20. He was of the view that few construction industry, if there is any, have insurance or commercial risk to protect against those who suffer injury or property damage, neither do they insure vehicles used in construction industry in a way it should be.
“For any economy that aspire to be a global leader, insurance should play a major role. Besides, using insurance products is also capable of closing Nigeria’s housing deficit,” said NIQS president.
The Commissioner for Insurance, National Insurance Commission (NAICOM), Mr. Fola Daniel, who was the keynote speaker noted that new buildings and not old buildings are collapsing because approvals are given without regard to safety and due process.
The Act also had it that every public building shall be insured with a registered insurer against the hazards of collapse, fire, earthquake, storm and flood.
According to Daniel, “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 egress for the purpose of obtaining educational or medical service, or for the purpose of recreation or transaction of business.
“The insurance policy under sub-section (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.
“Sub-section (4) provides for quarterly contribution of 0.25 per cent of net premium by every direct insurer on policies issued under sub-section one into a fire service maintenance fund to be established, administered and disbursed by NAICOM as grant or equipment to institutions engaged in fire fighting services,” said the insurance commissioner.
Under Builder’s liability insurance section 64, the Act stipulate that:
- No person shall cause to construct any building of more than two floors without insuring with a registered insurer, that his liability in respect of construction risk 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.
- That the duty to insure shall arise when a building is under construction.
- That a person who contravenes sub-section (1) of this section commits an offence and on conviction shall be liable to a fine of ₦250,000 or imprisonment for three years or both.
- That the objective of the law is to protect site workers and members of the public who may come into contact with the building under construction from the risk of collapse. Until now, site workers and other members of the public who lost their lives or suffered injury or loss of property received no compensation and are left at the mercy of uninsured owners of such buildings who in most cases never pay anything as compensation.
- That apart from positive compensation, builders and their contractors and agents are more careful to avoid injury or loss to third parties, and this underscores the special role of the quantity surveyors and related professionals.
Earlier in his speech, the Managing Director/CEO, Union Assurance Company Limited, Mr. Godwin Odah, spoke about the role of insurance in the quest for national development.
According to Odah, insurance is a mobiliser of long-term fund to economy. “Indeed, the huge deposit of bank funds composed of short terms is the absence of insurance life funds for long term lending. Life funds is key catalyst to national development without which there will be no funds to grow the built industry and provide housing for majority of Nigerians,” he said, noting that available funds can only be accessed at a high cost.
Source: The Guardian