By Maduka Nweke
As Nigerians continue to count losses arising from building collapse across the country, risk management experts say the only way to reverse the trend is for the Federal Government to make insurance of buildings compulsory.
Stakeholders in the build industry opine the ripple effect of such measure is legion. To kick start the campaign, for instance, the National Insurance Commission (NAICOM) is recommending the Builders’ Liability Insurance for construction workers.This is to ensure that there is indemnity to take care of human or material loss that may arise at construction sites.
To buttress this point, Chief Emmanuel Akamobi, the Chairman and CEO, Star Insurance Brokers Limited, lamented that many times, “when you tell builders to insure their buildings, they wait until there is force measures for them to comply.”
He added that this should not be so since insurance helps to reduce the huge losses suffered by the insured. “Those who run away from insurance do so to their own peril. Government should make insurance of building compulsory because that will in a way make companies careful and put measures on ground to mitigate losses before they get to the level that will put the owner of the building out of business. It is also good if insurance companies can monitor whatever property they insured. This will in a way act as checks and balances. If the company record less losses, then less people will sustain damages or injuries and the builders also will not lose money that would have been used in other areas, “he said.
NAICOM believes that developers, builders and contractors take on big risks every day. But, why take on unnecessary risks? Smart developers, builders and contractors insure their buildings under construction with appropriate builders’ risk insurance.
Construction and contract work encompass some of the most diverse occupations, and with this diversity comes with a number of risks. While some contractors and construction businesses have storefronts that clients could visit and potentially sustain an injury on the premises, others install drywall or kitchen cabinets in homes and could be held liable for the products if they inadvertently cause harm.
Commenting on this, Mr. Chudi Ubosi of Ubosi Eleh +Co, an Estate Surveyors and Valuers, said the significance of taking out insurance against unforeseen catastrophic events cannot be over stated. According to him, it is even difficult to think that people own homes and properties without insurance. “The simplest thing is that the insurance payment helps you recover in the event of a loss. But more importantly is that in the event of an injury or accident in the building as a result of poor services or facilities, it could protect and reimburse landlord financially from successful third party lawsuits.
“Our attitude in Nigeria is that of being kobo wise but Naira foolish. One of the main reasons comes from religious beliefs etc of ‘it is not my portion’ etc. Government must find a way to enforce the insurance of private and public buildings. We will be better off for it,”he said.
Section 65 of the Insurance Act 2003, for instance, explains that “contracting and construction business owners rely on adequate General Liability Insurance to safeguard their business against the mounting risks of potential lawsuits over accidents, injuries, and illnesses, especially in today’s environment. However, general liability insurance protects construction and contracting businesses and contractors benefit from that kind of insurance in three ways:
One is the General Liability coverage. This protects business assets. If a third party alleges bodily harm, injury, or property damage, and you don’t have General Liability coverage, your contracting or construction business assets could be seized to pay the judgment.
Two is General Liability Insurance. This coverage ensures your contracting or construction business can survive if a judgment is passed, and cover court costs and settlements up to the specified policy limits.
The last one is the General Liability, which gives contracting or construction business and employees security. With this coverage, you can carry out daily work, knowing that you and your employees are protected from uncertainty. General Liability coverage protects your business against claims brought against the company as a whole, as well as claims brought against individuals employed by the company.
For a contractor or construction business, General Liability Insurance offers the peace of mind that their contracting or construction business will have the necessary funds to continue daily operations — even when faced with a costly claim. General Liability Insurance covers the legal fees that can easily bankrupt a small contracting or construction business, such as the cost of attorney fees, witness fees, court expenses, and more.
But Mrs. Titilayo Adeleye, former Vice Chairman of Lagos State Chapter of the Nigerian Institute of Architects (NIA) and Managing Director, Eden Group (Architecture, Properties and Interiors) said the idea of not insuring buildings creates double problems for both the contractor and the client. In the event of any construction collapse or damage a lot of losses will not be indemnified. “If you insure your building, the building will be paid for in the event of collapse, those that sustained injuries and those that died as the case may be will also be taken care of,”she stated.
Other aspects of the Builders’ Liability Insurance also cover Injuries from working implements.
As you consider your coverage needs, it’s helpful to know the kind of claims General Liability Insurance safeguards your contracting or construction business against — and what it doesn’t. Take a look at the types of third-party claims typically covered by General Liability Insurance for contractors, and be sure to ask your Insurance agent about the policies that fit your business needs.
As professionals in a labour-intensive industry, builders and contractors know that no matter how careful a business is, accidents happen, especially when untrained visitors enter a worksite. With General Liability Insurance, though, you have the protection your small contracting or construction businesses need against these all-too-common accidents and lawsuits. In the event of an accident on your business premises, these policies pay for medical expenses, funeral expenses, and court-awarded compensation if a third party’s injury results in death. While General Liability covers injury- and illness-related expenses for third parties, your own employees’ on-the-job injuries are not covered under this policy.
But aside the above, there are other reasons for you to tow the line of insurance while doing your construction. Some of these includes;
Property Damage Claims
General Liability Insurance protects your contracting or construction business against the high cost of a lawsuit if someone alleges that your business damaged their property or that your business is responsible for their inability to use that property. For contractors who work in remodeling, it’s important to note that property damage liability coverage typically does not cover damage caused to client property you are working on.
Completed Products Claims
General Liability Insurance policies can protect your construction or contracting business against claims related to the services you’ve completed and the products you’ve produced. So if, for example, your business inadvertently installs kitchen cabinetry with unstable shelving that ends up injuring the homeowner, your contracting company could be found liable. With the proper coverage, however, your legal expenses and any damages can be covered, up to your policy limits.
Personal , Advertising Injury Claims
If you advertise for your contracting or construction business, you may want to consider a General Liability policy that covers copying another party’s advertising or infringing on copyrights or brands. Allegations that your contracting or construction business caused non-physical damages to another person or entity are all too common when competing with other businesses in the same industry.
Medical Expenses Claims
Should an accident happen on your business premises to someone who is not employed by your contracting or construction business, General Liability Insurance covers the expense of the injured person’s medical attention. Remember if someone is hurt on your property that you insist they seek medical assistance immediately. From an insurance standpoint, it’s better to compensate for immediate medical costs, rather than risk the liability for not attending to the situation right away.