Landlords and occupiers of public buildings nationwide risk fines of N1m, a 12-month jail term, or both if they fail to insure their properties against hazards, under the newly enacted Nigerian Insurance Industry Reform Act.

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 as determined by the National Insurance Commission (NAICOM).

Section 76 (6) defines public buildings as including a tenement house with more than one floor, hostels, buildings occupied by tenants, lodgers or licensees, as well as any structure accessible to the public for educational, medical, recreational, or business purposes.

In addition to safeguarding lives and property, the required insurance policies must also cover landlords’ and occupiers’ legal liabilities for bodily injury, death, or damage sustained by users of the premises and third parties.

The Act 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.”

It further provides that, “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 order the sealing of any building considered a public safety risk if no valid insurance cover is in place.

Under the compulsory insurance provisions, Section 77 mandates that all assets and employees of the Federal Government and its agencies must be insured against hazards and perils as determined by the Commission.

Section 78 requires all petroleum and gas refilling stations and installations to be insured against third-party losses from accidental fire outbreaks or explosions.

It also makes insurance mandatory for vehicles transporting petroleum and gas products against similar third-party risks. Responsibility for the cover lies with the owner of the products in transit or the operator of the refilling station.

The Act further requires that a Certificate of Insurance meeting the minimum standard be displayed prominently at refilling stations or included in the documents accompanying petroleum and gas products in transit.

Failure to comply attracts “a fine of at least N1m or a minimum term of two years’ imprisonment or both.”

Section 79 outlines how claims are to be settled.

It states, “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.”

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