A new era of building safety and accountability has arrived in Nigeria. Following the signing of the Nigerian Insurance Industry Reform Act, landlords and occupiers of public buildings now face a minimum fine of N1 million, up to 12 months in jail, or both, for failing to insure their properties.
Under the new legislation, all public buildings are required to be insured against a range of hazards, including fire, collapse, earthquakes, storms, and floods. The National Insurance Commission (NAICOM) is empowered to determine other applicable risks.
What Constitutes a Public Building?
The Act defines public buildings under Section 76 (6) as:
- Tenement houses with more than one floor
- Hostels and buildings occupied by multiple tenants or lodgers
- Any structure accessible to the public for education, medical services, recreation, or business.
The mandatory insurance policies must cover not only the property itself but also the legal liabilities of the landlord and occupier for any injury, death, or property damage suffered by users of the premises and third parties.
Key Provisions of the Law - Fire Services Maintenance Fund: Insurers must now remit 0.25% of their net premiums from these policies quarterly into a new fund managed by NAICOM. The fund will be used to provide grants and firefighting equipment.
- Enforcement: Defaulters risk fines up to ten times the required insurance amount. Persistent offenders may have their licenses canceled. NAICOM also has the authority to order the sealing of any building that is deemed a public risk and lacks valid insurance.
- Wider Scope: The new law extends beyond public buildings. Section 77 mandates compulsory insurance for all assets and employees of the Federal Government and its agencies. Section 78 makes it compulsory for all petroleum and gas stations, as well as vehicles transporting these products, to be insured against third-party losses from fires or explosions.
Non-compliance with the petroleum insurance mandate carries a minimum penalty of N1 million, at least two years in prison, or both. Owners must display a valid Certificate of Insurance at their stations or have it included in transport documents.
