Insurance Cover for Storey Buildings in Lagos

WITH buildings collapsing at an alarming rate in Lagos and other parts of the country, the directive by the Lagos State Government to developers/owners, especially of storey buildings to obtain insurance cover for the buildings is understandable. Hundreds of innocent people have lost their lives from what has become a tragic phenomenon and billions of naira have been lost as a result. It is just appropriate, therefore, that the government has chosen to put measures in place to curb this.

According to the General Manager, Lagos State Building Control Agency (LASBCA), Abimbola Animashaun, contractors would henceforth present insurance papers before they would be allowed to commence construction works. So desirable is this initiative that the question must be asked: Why has this not been enforced before now, after all the rule has always been there?

Anchoring on Section 48, subsections 1 to 3, of the Urban and Regional Planning Development Law, which stipulates that insurance must be in place before construction is started, Animashaun reiterated that not only would construction not start without insurance papers, there also has to be an approval of same by a relevant authority. At the same time, the contractors have to be scrutinised to determine their capability. If Lagos is able to enforce this directive, it would also help to regulate the building industry by ensuring that buildings meet minimum standards. Incidents of sharp practices would be reduced. In turn, it would enhance public safety of lives and property.

But it needs to be emphasised from the outset that a mere expression of this desire is not strong enough to bring sanity to a critical sector like the building industry. Apparently, there is a legislation that requires builders to have insurance cover, and without doubt, the law provides sanctions for non-compliance. It is not clear, in the circumstance, what would be done in the renewed drive to people who may have failed to comply with the law.

Indeed, why has the LASBCA been complacent in enforcing the rule? Over the years, developers and building owners have been allowed to erect defective structures without insurance and without sanctions and it seems that the LASBCA has just woken from a deep slumber after a lot of damage has been done. But now that the agency has woken up to its responsibility, can it and would it do the work of enforcing the law for, obviously, the problem lies in enforcement, compounded by corruption and sharp practices?

Of course, before insurance approval, certain fundamental questions must also be resolved. The integrity of buildings must be ascertained, by ensuring compliance with soil and materials integrity tests. Since the value of insurance would depend on such factors as building materials integrity, size of the building, location and use, among others, the premium payable, it is hoped, would be case-specific. Consequently, there can be no blanket insurance cover for all buildings, meaning that a lot of work needs to be done to ensure smooth implementation.

While the insurance demand on buildings is not altogether new, failure to enforce has created a gap that has to be filled under an insurance regime. There is, therefore, the high probability that a fully enforced insurance regime could lead to increase in house rent.

Whereas, the measures are meant to ensure public safety, the fact is that some greedy developers and agents may capitalise on the insurance regime to arbitrarily increase house rent. This is where the Lagos State Government should intervene to ensure that members of the public are not unduly exploited. Government should, therefore, mount a public enlightenment exercise to educate members of the public on the details and desirability of the compulsory insurance regime.