Landlords and occupiers of public buildings in Nigeria now risk a fine of N1 million, a jail term of 12 months, or both, if they fail to insure their properties against hazards. This is part of the newly signed Nigerian Insurance Industry Reform Act which introduces tougher measures to improve safety and accountability.
The law makes it mandatory for all public buildings to be insured against risks such as collapse, fire, earthquake, storm, flood and any other hazards identified by the National Insurance Commission (NAICOM). Section 76 (6) of the Act defines public buildings to include tenement houses of more than one floor, hostels, buildings occupied by tenants, lodgers or licensees, and any building used by the public for education, medical services, recreation, or business transactions.
The Act also requires insurance policies on public buildings to cover the legal liabilities of landlords and occupiers for injuries, deaths or damages suffered by users of the premises or third parties.
In addition, the law establishes a Fire Services Maintenance Fund, which will be financed by insurers through the payment of 0.25 per cent of net premiums received quarterly from policies issued under this provision. The fund will provide grants or equipment to institutions engaged in firefighting services. Any insurer who defaults in making the payment will be fined up to 10 times the amount due, and persistent failure could lead to the cancellation of the company’s operating licence.
The Act further empowers NAICOM to order the sealing of any building that poses serious risks to the public if no valid insurance cover is in place.
Still under the compulsory insurance provisions, Section 77 makes it mandatory for all assets and employees of the Federal Government and its agencies to be insured against hazards determined by the Commission. Section 78 also mandates that all petroleum and gas refilling stations, installations, and vehicles transporting petroleum and gas products must be insured against third-party losses resulting from fire or explosions.
The owners of petroleum or gas stations, as well as transporters, are required to display a valid Certificate of Insurance at their facilities or include it in documents covering petroleum and gas products in transit. Failure to comply with this requirement attracts a penalty of at least N1 million, or a jail term of not less than two years, or both.
On claims settlement, Section 79 provides that where a house or building insured against fire is damaged or destroyed, and there is no evidence of fraud or wilful action by the owner, insurers must pay out claims to rebuild or repair the property. However, the law allows insured persons to decide whether to reinstate the damaged property or receive cash compensation not exceeding the insured sum.
The Nigerian Insurance Industry Reform Act is seen as a landmark development in the sector. By making insurance compulsory for public buildings, fuel stations, and federal government assets, the law aims to protect lives, reduce losses, and ensure that liability is adequately covered when accidents happen.
