Not Having Insurance For Your Building Could Get You A Jail Term

Jul 03, 2017

The National Insurance Commission (NAICOM), in collaboration with the Federal Fire Service and the Nigeria Insurers Association (NIA), has commenced full enforcement of the compulsory public building insurance, in accordance with Section 65 (1) of the Insurance Act, 2003. This enforcement was necessitated by the frequency of building collapse and disastrous fire outbreaks in the country.

According to the Insurance Act, 2003, it is compulsory for all public buildings to be insured with a registered insurer, by their owners, against the dangers of collapse, fire, earthquake, storm and flood. The insurance policy also covers the legal liabilities of an owner or occupier of premises in respect to loss of or damage to property, bodily injury or death suffered by any user of the premises and third parties.

Read also about Accident Polices

“Public building” according to Section 65 (2) of the Insurance Act, 2003, includes a tenement house (any multi-occupancy building), hostel, a building occupied by a tenant, lodger or licensee and any building to which members of the public have access to for the purpose of obtaining educational or medical service, or for the purpose of recreation or transaction of business. Thus, owners/or operators of functional public buildings such as hotels, hospitals, restaurants, bars, cinemas, schools, banks, shopping malls, to mention but a few, are mandated by law to procure insurance for their property.

The legislation for compulsory public building insurance is premised on the reality that a public building, like any other infrastructure, is at the risk of sudden accident, which may damage or destroy the building and properties contained in it, and may also cause harm to occupants. This may further result in huge human casualties, many of whom may never be adequately compensated.

Read also about property insurance

Statistics from the Federal Fire Service shows that between 2012 and 2015, N5.95billion worth of properties were destroyed in different fire accidents across the country. In Lagos alone, five major fire incidents resulted in the loss of more than 150 lives. In spite of these alarming statistics, only a few of the estimated 10 million public buildings in Nigeria are insured, thus leaving the lives of innocent people open to risk without buffer.

With the intensive enforcement of public building insurance being undertaken by NAICOM, NIA and the Federal Fire Service, defaulters of this compulsory regulation are liable on conviction to a fine of not more than N100, 000 or imprisonment for one year, or both.

Who does this regulation apply to?

This compulsory public building insurance applies to all owners (landlords) and occupiers (tenants) of public premises. It is advisable for you to ask your landlord to provide evidence of insurance in your tenancy agreement to ensure that you are adequately protected.

As a business owner, we recommend the Leadway Property Insurance policy, categorised under ‘Fire & Allied Peril’ designed to protect you against loss or material damage to property caused by fire and other associated risks. The policy covers your building, furniture, equipment and electronics against material damage caused by fire, escape of water from any tank, apparatus or burst pipes, lightning, strike and riot or certain explosions caused by the industrial use of the premises.

For the Small & Medium Scale business owner, the L-BOSS (Leadway Business Owner Support Scheme) is designed to help protect your business against various risks which includes but is not limited to: occupier’s liability cover against legal suits relating to injury or loss suffered by visitors to your premises, and material damage to your business premises and their contents (e.g. computers, items belonging to customers etc.) including motor vehicle insurance cover against fire, lightning, limited explosion, earthquake, volcanic eruption, malicious damage, strike, riot, flood, storm, impact and burglary cover (burglary cover applies to contents only), which extend to the items in your business premises (as per your list submitted).

For more information on how to be compliant with the provisions of the Insurance Act of 2003, and how you can access the various Leadway insurance policies, please call Leadway Assurance on our customer care lines (01) 2800700, (01)2800701 and 08129997054 or send an email to for more details.

Be the first to know