Fire Service to benefit from potential N50bn public building insurance fund
With estimated 10 million public buildings spread across the country capable of generating about N50bn premium annually for the nation’s insurance sector, if enforced, the federal Fire Service could get at least N125m annually, BusinessDay investigations have revealed.
This fund, analysts say, would not only empower the Fire Service with modern state-of-the-art fire-fighting equipment, but would also reduce pressure on government budget and bring efficiency in fire fighting mechanisms across the country.
The analysts who spoke to BusinessDay said this is a huge fund lying untapped because the enabling law making insurance of public buildings compulsory has not be enforced, so third party victims go uncompensated many times.
Gbolahan Olutayo, managing director, Goldlink Insurance plc, said the challenge stopping both the industry and the Fire Service agency from benefiting from this huge market is lack of enforcement. “All that is needed is enforcement because the industry is doing the necessary awareness,” he said.
Olutayo stated that if government can rise up to the responsibility, and insist that “before you get your tenement rate certification or other building approvals, there must be evidence of insurance, then this area of insurance would have become a huge success.
“Tenement rates are enforced and every property owner pays it, while cant insurance of public buildings be enforced, Olutayo asked.
On what the premium for public buildings could cost, Olutayo said it’s a function of the height of the building (number of floors); available safety measures including fire-fighting equipment and what purpose the building meant for.
Section 65 of the Insurance Act 2003 stipulates that “Every public building shall be insured with a registered insurer against the hazards of collapse, fire, earthquake, storm and flood. The penalty for non-compliance with this occupier’s liability insurance is N100,000 or one year imprisonment or both.”
Fola Daniel, commissioner for insurance, during a recent visit to Joseph Garba Anebi, the controller general of the Federal Fire Service, informed him that the insurance of public buildings is made compulsory by virtue of the provisions of section 65 of the Insurance law.
He said the number of public buildings in Nigeria is estimated to be 10 million “but it is sad that most of these buildings are uninsured, thereby putting the lives and property of third parties who have rights of access to these buildings at great risk.”
Daniel explained that the object of the visit was to seek a mutually beneficial partnership and collaboration with the Fire Service in the ongoing drive by the National Insurance Commission (NAICOM) to implement and enforce compliance with relevant provisions of the extant laws relating to insurance of public buildings in the country.
According to Daniel, the meeting was in recognition of the unique role of the fire service especially in safeguarding the society from losses arising from fire and other perils, stating that the insurance law provides that 0.25 percent of insurance premiums generated from public buildings be set aside to assist in the funding of the fire service.
“The fund is to be applied in the procurement of firefighting equipment for the agency.”
Anebi in his response said the federal Fire Service is ready to collaborate with NAICOM to ensure effective implementation and enforcement of the law.
According to him, “We already have an enforcement team in place that ensures compliance with our codes which we can also deploy for this purpose. We have also inspectors who carry out risk assessments of buildings. The task of verifying compliance with the insurance law could also be added to the check-list of our inspectors.”
Modestus Anaesoronye