Builders liability insurance

Records from the Federal Ministry Power, Works and Housing show that 54 buildings collapsed in Nigeria between 2012 and 2016. I am sure these are the major ones they could track. With our notoriety for poor record keeping and data management, you can be sure that the number is much higher than this. But even this number in just four years is scandalous. It comes to about 13 collapsed buildings every year.

There is nothing to show that the number of collapsed buildings will come down any time soon. Contractors cut corners and government supervising agencies are weak and sloppy in their oversight functions. With building collapse comes third party loss of property, bodily injuries and death. For instance, the Synagogue of All Nations six-storey guest house that collapsed in 2014 trapped about 300 hundred people. Over 100 people were injured, while 116 people died. In 2016, a five-storey building under construction, belonging to Lekki Gardens, collapsed, killing 34 people with many others injured.

On November 23, 2018, a seven-storey building collapsed in Port Harcourt, Rivers State. I am not sure if they have been able to bring out all the people trapped in the rubbles, and how many will still be alive more than a week after the incident. We have many challenges in this part of the world. The priority of those in charge of building plans approval and supervision of buildings under construction is not safety of lives and property. That is probably one of the reasons why the authors of Builders Liability Insurance came up, not only with the policy, but made it compulsory. The other reason is that third parties are involved. Ordinarily, Builders Liability Insurance should be the last bus stop in efforts to protect the interest of third parties. The building approval process and oversight functions of the regulatory authorities should the first lines of defence of third party interest. But in Nigeria, pecuniary interest, both official and personal, take precedence.

In all the cases of buildings under constructions included in the 54 cases of collapsed buildings cited above, it is just possible that none had a Builders Liability Insurance. Where does that leave the victims who suffered bodily injuries? In the Port Harcourt incident, one of the survivors already had one of his limbs severed by the time he was rescued. What happens to victims who lost their property? Finally what becomes of the fate of families who lost their bread winners? These are what Builders Liability Insurance is meant to take care of: to ensure that third parties who suffer losses in building collapse do not suffer double tragedy by going uncompensated.

Specifically, the Insurance Act of 2003, Section 64, requires every owner or contractor of any building under construction with more than two floors to take out an insurance policy to cover his liability arising from construction risks such as his negligence or that of his servants, agents or consultants, which may result in death, bodily injury or property damage of workers on site or members of the public. This insurance policy also covers liability for collapse of buildings under construction.

On this insurance, I have previously said that: “A census of buildings of three floors and above under construction has shown that many owners and contractors of these buildings do not comply with this compulsory insurance. This policy is not being strictly enforced. Consequently, third parties who suffer bodily injury or property damage have no recourse to compensation, and the families of third parties who die are left high and dry. The insurance industry should lobby these candidates (contestants in the 2019 general elections) so that as a policy, Insurance of Buildings Under Construction will form part of the approval of the building plan. In addition, the relevant supervising government agency should ensure that if construction goes beyond a year, the insurance should be renewed every year as long as construction is on. Also the architect, mechanical engineer, structural engineer, electrical engineer, quantity surveyor and any other building professional playing a role in the project should attach his professional indemnity as part of the mandatory documents necessary for the approval of the drawings and building plan.”

Beyond these, the artisans, who suffer losses most when buildings collapse, have associations (I saw  the secretariat of welders on the outskirt of Benin City, the Edo State Capital, recently). These associations should form strong lobby groups to lobby government and ensure strict enforcement of this compulsory insurance in the interest of their members and their families.

At the inauguration of every president and governor in Nigeria, they swear an oath to uphold and protect the constitution of the Federal Republic of Nigeria. Chapter four of the constitution deals with the fundamental rights of Nigerians and include right to life and right to dignity of human persons. Right to life include providing decent and conducive working environments that enhances safety. And in the event of a fortuitous event, like a building collapse, the laws, which are already in place, should be enforced to protect these rights they have sworn an oath to protect. Enforcing compulsory insurances in Nigeria is not rocket science. It is easy with the willingness of government. I always cite the pensions sector as a good example of what happens to a sector when it gets government backing. Builders Liability and other compulsory insurances are waiting for that of government backing.