Introduction
The rate of the incessant collapse of buildings in Nigeria underscores the need for the government to implement the enforcement of compulsory insurance for building under construction in Nigeria. The collapse of the 21 Storey building on Gerard Road, Ikoyi, Lagos on 1st November 2021 and another building collapse in Badagry soon thereafter, both of which recorded many casualties necessitated the Lagos State Government through the Lagos State Building Control Agency, the Lagos State Safety Commission and the Nigerian Insurers Association (“NIA”) to commence engagement with stakeholders on the enforcement of compulsory insurance of buildings under construction in Lagos State.
What building must be insured?
It is a mandatory requirement by Section 64 of the Insurance Act, for all buildings of more than two (2) floors under construction to be insured. This has become necessary because most public buildings in Nigeria are not insured thereby leading to loss of lives and property without remedy.
Also, by Section 48 (1) and (2) of the Lagos State Urban and Regional Planning and Development Law, 2010, a developer or owner of a building under construction (involving a structure of more than two (2) floors) shall at the time of submitting his application to commence building works to the Lagos State Building Control Agency also submit a General Contractors All Risk Insurance Policy Certificate evidencing insurance of the building.
Where necessary, the owner or occupier of the building shall within thirty (30) days of service of demand notice under Section 36 of the Lagos State Urban and Regional Planning and Development Law, produce the Certificate of Insurance to the Lagos State Building Control Agency for verification and on an annual basis.
What are the requirements for insuring a public building in Nigeria?
The requirements to be provided for the Insurer to insure the building include the following:
i Name of the client;
ii Description of the building (e.g. how many floors does the building have?);
iii Location of the building;
iv Limit of Indemnity payable per occurrence;
v Aggregate limit of indemnity annually;
vi Use of the building (whether a shopping mall, warehouse, factory, residential
premises, etc.)
Who are those likely to be protected by the insurance of public buildings?
i. Site Workers;
ii. Members of the Public;
iii. Owners of the insured building.
Whose obligation is it to insure a public building?
i Owner and /or
contractor of a building under construction; and
ii Sub Constructors, Agents, Servants and Consultants of the Contractor.
Who will be the beneficiaries of the policy?
i. Survivors of the site worker or member of the public who dies in a collapsed
construction work,
ii. Site Worker or Member of the public who becomes injured in a collapsed construction work, and
iii. Any third-party property who suffers damage from a building collapse.
What is the cost of insuring a public building?
The cost of insuring a public building is negotiable between insurance company and the owner of the building. The amount to pay premium will depend on the value, location and type of building.
What is the consequence for failure to insure a public building?
The Lagos State Building Control Agency is empowered to enter the construction site to compel compliance under Section 39, seal off any building which contravenes the requirements of the law under Section 40, demolish the property under Section 41 as well as recover the cost of demolition from the developer under Section 42 and to prosecute any real estate firm or developer in charge of the construction for any offences stated in Section 43. There are jail terms and fines ranging from N250,000 to N500,000 stipulated by law as penalty for persons convicted under the Lagos State Urban and Regional Planning and Development Law, 2010.
