By Omoh Gabriel, Business Editor
Sequel to frequent incidents of collapsed buildings in the country, especially buildings under construction, the National Insurance Commission (NAICOM) today released guidelines on insurance of such buildings as well as public buildings.
The Commissioner for Insurance, Chief Emmanuel Chukwulozie, said that section 64 of the Insurance Act, 2003 provided that “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.”
Also released today is section 65 of the act which stipulates that “every public building shall be insured
with a registered insurer against the hazards of collapse, fire, earthquake, storm and floods”.
The act identified such public buildings as buildings in which members of the public have right of egress and aggress, saying that they include all rented houses or apartments, university hostels, dormitories in institutions of learning, hostels of private organisations, club houses, hotels, guest houses, schools, seminaries, colleges, universities and other institutions of higher learning.
The other public buildings that must be compulsorily insured and covered by the appropriate property insurance policy include hospitals, maternity centers, medical centers, pharmacies, dispensaries, amusement parks, fitness centres, zoological gardens, cyber cafes and museums. The other places of transaction of business such as toll plazas, companies, offices, business centres, supermarkets and any other building that may constitute a public building but not indicated here are all covered by the provisions of section 65 of this act. The Commissioner for Insurance explained that sight must not
be lost of the objective of the law in the provision, stressing that the aim of the provision was to reduce the gross economic loss of wealth to the nation caused by fire and allied perils. The cover is also aimed at restoring economic activities of the innocent public who may sustain injuries in addition to having their properties damaged as a result of the hazards insured against.
It stipulates further that the construction risks could be 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.
The act recognises the importance of protecting workmen and third parties at construction sites by ensuring that high construction risks associated with high rise buildings are covered by insurance ab initio. According to Chukwulozie, in such constructions, ground floor is interpreted as first floor and that any building above two floors must be covered by this provision.
The Commissioner said further that there was a need to obtain insurance for any building under construction as they are all vulnerable to accidents, damage and destruction as well as bodily injuries and death resulting therefrom. He stressed that an outstanding advantage in this provision is that builders are bound to be more careful by ensuring that all laid down rules and technical requirements by appropriate authorities were complied with before any construction was engaged in by any person.
Ideally, this insurance should be effected at the planning stage of any affected building, implying that the
town planning or local government authorities and other bodies responsible for approving such building plans are to request for acceptable evidence of insurance as prescribed by NAICOM before approving such plans.