‘Building insurance defaulters will face N5 million fine, imprisonment’
The penalty of non-compliance awaits property owners who fail to heed the compulsory insurance of public buildings and buildings under construction when the Insurance Industry Consolidated Bill is passed into law. Defaulters would face a fine of N5 million or imprisonment to a maximum term of 12 months.
With this provision, the bill seeking compulsory insurance of public buildings and buildings under construction scaled second reading on the floor of the Senate last week.
The Insurance Act (Amendment) Bill, 2021, was sponsored by Senator Amosun Ibikunle Oyelaja of Ogun Central. The bill when passed into law would, among others, make it mandatory for victims of building collapse to be compensated by insurance companies.
During the debate of the bill, Amosun said: “The need for the amendment of the Bill was necessitated by the prevalence of collapsed buildings in many Nigerian cities which have led to the unquantifiable loss of lives and property as well as permanent disability.
“There has been an increase in the cases of collapsed buildings in the country, most especially in the last 10 years.”He recalled that a three-story residential/school building on Massey street, Ita Faaji area of Lagos Island in March 2019, resulted in the loss of 20 lives with 43 persons injured while another under construction located at No 9 Ezenwa Street, Onitsha, left at least six persons dead.
According to the lawmaker, the Lekki building collapse, which occurred on Tuesday, March, 2016, resulted in the killing of no fewer than 34 persons and injuring several others while a six-story guesthouse belonging to a church in Ikotun area of Lagos in September 2014 collapsed trapping about 300 people out of which over 100 were said to have lost their lives.
He continued: “These cases and several others, too numerous to mention, are considered as some of the worst incidences of a collapsed building in Nigeria, in recent times.
“In a nutshell, the bill seeks to address the following: Provide security as a remedy for victims of collapsed buildings; fill the gap in the failure to provide for a limit of liability in respect of third party liability in compulsory insurance of public buildings under construction; provide adequate penalty provisions in line with current socio-economic realities for contravention of the law and restore the glory of the insurance industry which is characterised by gaps in addressing the multiple risks in the construction industry.”
Senate President, Ahmad Lawan, referred the bill after it scaled second reading to the Committee on Banking, Insurance and Other Financial Institutions for further legislative work.
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