Landlords and occupiers of public buildings across the country will be fined N1m, jailed for 12 months, or both if they fail to insure their properties against hazards, according to the newly signed Nigerian Insurance Industry Reform Act.
According to a copy of the new law, all public buildings must be insured against risks such as collapse, fire, earthquake, storm, flood and such other hazards as the National Insurance Commission may determine.
Section 76 (6) defines public buildings as including a tenement house of more than one floor, a hostel, a building occupied by a tenant, lodger or licensee and any building to which members of the public have access for obtaining educational or medical service or for recreation or transaction of business.
In addition to protecting lives and property, insurance policies are required to cover the legal liabilities of landlords and occupiers for bodily injury, death, or damage suffered by users of the premises and third parties.
A part of the new law stipulates that, “Also, every direct insurer on policies issued under subsection (1) shall pay 0.25 per cent of the net premium received quarterly into a Fire Services Maintenance Fund which shall be established, administered and disbursed by the Commission to provide grants or equipment to institutions engaged in firefighting services.”
“An insurer who defaults in making payment as required under subsection (3) is liable to a penalty of not more than 10 times the amount payable, provided that persistence in non-compliance with the provision shall be a ground for the cancellation of an insurer’s registration. An owner or occupier of premises who contravenes the provision of this section commits an offence and is liable on conviction to a fine of at least 1,000,000 or imprisonment for a term not exceeding 12 months or both.”
The law also empowers NAICOM to demand that the appropriate authorities seal up any building that poses a serious risk to the public if no valid insurance cover is in place.
Still under the compulsory insurances provided for by the new Act, section 77 stated that all assets and employees of the Federal Government and its agencies shall be insured against the hazards and perils of such nature as the Commission may determine.
Section 78 stipulates that all petroleum and gas refilling stations and installations be insured against third-party losses occasioned by accidental fire outbreak or explosion. Also, all vehicles transporting petroleum and gas products shall be insured against third-party losses occasioned by accidental fire outbreaks or explosions.
The responsibility of the cover is on the owner of the petroleum and gas products in transit or the owner or operator of the relevant refilling station. The law states that a copy of the Certificate of Insurance that meets the minimum requirement should be displayed in a conspicuous location at the refilling station or included in the documents covering the petroleum and gas products in transit.
Also, a person who fails to comply with subsections is liable on conviction to a fine of at least N1m or a minimum term of two years’ imprisonment or both.
Section 79 (1) dwelt on how claims are settled, stating, “Where a house or any other building insured against loss by fire is damaged or destroyed by fire and there is no reasonable ground to suspect that the owner, occupier or any other person who insured the house or other building is guilty of fraud in respect of the insurance, or of wilfully causing the fire, the insurer who is liable to make good the loss may, on the request of any person entitled or interested in the insured house or building, cause the insurance money payable to be paid out and expended as set out in subsection (2).
“(2) The insurance money payable under subsection (1) shall be paid out and expended towards rebuilding, reinstating or repairing the house or any other building so burnt down, damaged or destroyed by fire, unless (a) the party or parties claiming such insurance money, within 60 days after the claim is agreed, give security to the satisfaction of the insurer that the insurance money will be paid out and expended as stated; or (b) the insurance money is, at the time, settled and disposed of among all the parties entitled as the insurer may determine with the approval of the court on the application of the insurer or any of the interested parties.
“(3) Notwithstanding the provisions of subsection (1), the insured shall have the right to decide whether to reinstate the house or building damaged or destroyed by fire or to pay the insured for the loss suffered but not exceeding the insured sum.”