Chika Izuora in this piece examines options available for the realisation of the lofty but capital intensive National Integrated Infrastructure Master Plan (NIIMP)
Building insurance policies
The federal government has under the Insurance Act provided that it is necessary for building owners to have a policy in place to protect themselves in case something catastrophic happens, like a fire or flood or building collapse of structures for commercial, private and residential use.
Experts have noted that incidents happen all the time, and there are different types of insurance that can meet the needs of building owners for any situation.
There are many policy options available to building owners to provide the best coverage for their property; a comprehensive liability policy provides coverage for property damages and injuries suffered in and around the building and the surrounding structures if it is included in the policy.
Residential property owners can protect their buildings from specific incidents by purchasing individual policies or investing in a bundled package, which may cut premium costs. Incidents that might be named in a policy are fire, flood, earthquake, theft and vandalism. Under the existing law, government considers the risky nature of doing business in the 21st century, especially the threats hounding our lives and the unfortunate reality of accidents staring our way and therefore, there is every reason an insurance policy should be considered to be somewhat a compulsory need.
Insurance laws though vary from nation to nation based on what legislators in each country think will be best for the citizens (policyholders) and the insurance providers in general. In Nigeria, while there are dozens of renowned corporations extending their services in the insurance industry, it is generally important to understand the insurance laws of the land and the nature of insurance policies available before one can settle for an ideal plan, whether for business or personal purposes.
The National Insurance Commission (NAICOM)
The NAICOM was established by law as a statutory body of the federal government. As the industry regulator and as set out in the Nigerian Insurance Act 2003 – NAICOM reinvigorates insurance practice, use and regulations in the nation. In 2011, the NAICOM had fixed the end of March that year as the date by which all compulsory insurance policies, under various Nigerian statutes, would be fully enforced and penalties imposed to non-compliant players.
About 16 insurance laws were made compulsory to guarantee the protection of lives and properties as stipulated in the 2003 Act. The need to enhance economic growth and national development were the other factors motivating the imposition of these laws. Out of these 16 compulsory laws, five fall under the enforcement of the NAICOM. These include the Statutory Group Life Insurance which requires that all employers should make up group insurance premium payments so as to maintain the Life Insurance (policy) to protect an employee for a minimum three times the total yearly emolument of the employee.The Health Care Professional Liability Insurance says that all health care service providers in Nigeria must obtain and retain a professional indemnity insurance cover from an insurance provider listed and approved by the National Health Insurance Scheme (NHIS) Council while under the Builders Liability Insurance, real property builders that have more than two floors are required to register and insure the building from all risks resulting from the builder’s negligence or construction negligence from the builder’s staff, consultants or agents.
There is also the Occupiers Liability Insurance which stresses that public buildings must be insured against hazards such as collapse, earthquake, fire and floods. The Motor Vehicle Third Party Insurance states that no one should use a motor vehicle unless it has been insured against damage to the property of third parties. In addition to these five, Employee’s Compensation (which replaced workmen compensation) is the other kind of insurance policy that must not only be obtained but also retained in Nigeria. This policy requires every employer to, within the first two years of the start of the Employee’s Compensation Act, make a minimal contribution of 1 per cent of what the employee totally earns to the Employee Compensation Fund. This compensation fund is used to compensate an employee in the case of disease, disability or injury arising in or out of the course of their employment.
Having building insurance gives the owners the peace of mind that their property and liability to pay for potential lawsuits are taken care of. Their insurance company will bear the responsibility for paying claims filed up to the coverage amount. If a lawsuit is brought upon the insured, the insurance company will conduct its own investigation to make sure the legal matter is justified. Also, building owners buying a policy have the benefit of having the insurance pay for replacement costs instead of actual costs. Although it is more expensive than actual cost coverage, which pays for the value at the time of the incident, this would pay the cost of items that need to be replaced regardless of when the incident occurred.
An insurance policy’s main obligation is to make someone or something whole again after a loss or damage. An insurance company considers several factors before presenting an applicant with a premium offer. Several factors are the coverage amount, risk from location, type of work conducted inside the building and the history of claims similar properties have submitted.
The offer from the insurance company determines the amount of risk it is taking to provide coverage. It is the responsibility of the policyowner to provide premium payments to receive and maintain coverage. Not having enough building insurance to cover losses or damages to property or to people can create a huge burden for building owners. This shortcoming can leave them responsible for award amounts and rebuilding costs that overrun their coverage limit.
Building owners should re-evaluate a policy periodically to make sure the coverage amount reflects the changes in value to the property and it is comprehensive enough to cover all foreseeable events.
Building insurance provides coverage for the building and most of the property on the land around it. This insurance covers the building structure and inside fixtures such as sinks in the kitchen and bathroom, tubs, pipes and toilets. Outside fixtures such as walls and fences that enclose a property may also be covered as well as garages and sheds.
In commercial buildings, this policy may cover the furnishings inside such as furniture and equipment and also inventory. Some policies cover personal injury or death that happens inside the building.
Source : Leadership