JOSEPH INOKOTONG, in this piece, writes that Nigeria can safeguard its infrastructure investments, ensure the continuity of essential services and promote a safer, more resilient environment for the citizens by insuring public buildings.
COMPULSORY insurance refers to insurance that is required by law. In most countries, it is mandatory to have at least some form of insurance, such as car insurance, public building and building under construction insurance, health insurance, or workers’ compensation insurance.
Compulsory insurance is intended to protect the public interest and to ensure that individuals and businesses are held accountable for any damage or injury they may cause.
However, experts say that compulsory insurance has its pros and cons. On the one hand, it can help to ensure that people are protected from the financial consequences of accidents or injuries. On the other hand, it can be seen as an infringement on personal freedom and can add an additional financial burden to individuals and businesses.
No matter the perspective one may hold, it is obvious that the potential benefits of compulsory insurance can outweigh the potential costs. For example, in countries with universal healthcare, everyone has access to medical care regardless of their income level and this is only possible because everyone pays into the system through compulsory health insurance. So while compulsory insurance may seem like an inconvenience, it can actually be quite beneficial for society as a whole.
Insurance has solutions for public buildings and buildings under construction. There are a few different types of insurance that are used for public buildings and buildings under construction. One common type of insurance is builder’s risk insurance, which covers the property and materials associated with a construction project from the time they are delivered to the site until the project is complete. There is also the cost of construction insurance, which covers a project during the building process and usually includes coverage for the structure, materials and the cost of labour.
In all aspects, especially this, stakeholders’ collaboration is key to ensuring that people comply with compulsory insurance requirements. Government agencies, insurance companies and the general public all have a role to play in ensuring that compliance is achieved. Government agencies can provide information and education about compulsory insurance and they can enforce compliance through fines or other penalties.
Insurance companies can work with customers to make sure they understand the coverage they are required to have, and they can also help educate the public about the benefits of compulsory insurance. The general public can play a role by following the rules and making sure that they have the appropriate coverage.
In spite of the enormous benefits of compulsory insurance, some people still raise the ethical question. They query if it is ethical to require people to purchase insurance against their will.
Indeed, the ethical implications of compulsory insurance are quite complex. On one hand, it could be argued that it is unfair to force people to buy insurance against their will, and that this is a violation of personal freedom. On the other hand, there is an argument to be made that it is ethically necessary to require people to have insurance to protect themselves and others from financial hardship in the event of an accident or disaster.
Without mincing words, the benefits of compulsory insurance, like protecting people from financial hardship, outweigh the potential downsides, like infringing on personal freedom, but there is a way to strike a balance between the two, it is not an all-or-nothing situation.
Again, experts say one way to strike a balance might be to provide more choice and flexibility within the compulsory insurance system. For example, people could be given a choice of insurance providers, or they could be allowed to choose the level of coverage they need. This could help to ensure that people have the protection they need without infringing too much on their personal freedom. This can be a good way to strike a balance between the benefits and drawbacks of this system
A contending issue is about the cost of compulsory insurance, how the cost should be covered; if it should be either the responsibility of individuals or should it be funded through taxes?
There are a few options for covering the cost of compulsory insurance, especially that of building insurance and building under construction. One option is to make it the responsibility of individuals, by requiring them to purchase insurance policies on their own. Another option is to fund the cost of insurance through taxes, either by increasing general taxes or introducing a special tax for this purpose. And a third option is to use a combination of these approaches, with individuals paying some of the cost and the government subsidising the rest.
The desirable is to fashion out the most fair and practical option. Here, it really depends on the perspective and values. Some people might believe that it is most fair for individuals to pay for their own insurance since they are the ones who will benefit from it. Others might believe that it is fairer for the cost to be covered through taxes since everyone benefits from having a safe and well-insured society. And some might believe that a combination of the two is the most fair and practical option.
Another angle is how compulsory insurance could be implemented in a way that ensures that everyone has access to it, regardless of their income or social status.
One way to ensure that everyone has access to compulsory insurance is to offer subsidies or vouchers to people who cannot afford to pay the full cost. This could be based on income, or it could be open to everyone. Another way to ensure access is to make insurance policies portable so that people can keep their coverage even if they change jobs or move to a different location. This can help to ensure that everyone has access to compulsory insurance.
However, there are still some potential challenges to consider. For example, some people might not be aware of the subsidies or vouchers available to them, or they might not have the time or resources to apply for them.
Interestingly, one way to overcome the challenge of limited awareness of subsidies or vouchers is to make sure that information about them is widely available and easy to understand. This could be done through a combination of traditional and digital media, including TV, radio, print, and social media. Another way to overcome this challenge is to make sure that there are multiple channels for people to apply for subsidies or vouchers, including in person, by phone, and online.
The National Insurance Commission (NAICOM) has a firm grasp of compulsory insurance in Nigeria. This has informed its recent decision to embark on sensitisation programme to Nasarawa State where the commission explained to stakeholders the benefits of the exercise. The stakeholders were educated on the benefits of compulsory insurance – Public Buildings and Buildings under Construction, Third Party Motor Insurance, among others.
The Commissioner for Insurance and CEO of, National Insurance Commission, Mr Olorundare Sunday Thomas, who led a delegation from the commission paid a courtesy visit on the Governor of Nasarawa State, Abdullahi A. Sule, to intimate him and members of his executive council about the benefits of insurance.
On its ongoing compulsory insurance drive on public buildings and buildings under construction, the NAICOM said the recent alarming rate of building collapses in Nigeria underscores the urgent necessity of implementing comprehensive insurance for this category. It noted that these two types of insurance are part of the compulsory insurance policies of the commission, that give succour to people in the event of a building collapse or the occurrence of other risk factors.
According to the Building Collapse Prevention Guild, at least 62 catastrophes were recorded in 2022, causing 84 deaths and injuring 113 persons. Lagos had 20 cases, while Kano and Anambra recorded five building accidents each, and Delta and Jigawa had four each. Also, 135 cases were reported between 2007 and 2013. These collapses not only resulted in the loss of invaluable human lives but also led to significant financial burdens for the government and communities.
“So, as a nation, as landlords and building owners, as project managers and site builders, and users and workers within public buildings, we need to start taking these two insurance policies very seriously – The Public Building Insurance and the Insurance of Building under Construction”, the NAICOM stated. It pointed out that they can provide financial protection against such unforeseen disasters, enabling swift recovery, reconstruction, and the restoration of critical services.
By insuring public buildings, Nigeria can safeguard its infrastructure investments, ensure the continuity of essential services, and promote a safer, more resilient environment for the citizens. It highlighted that the upcoming conference will bring stakeholders together to forge a way forward to drive more awareness and compliance with Public Building Insurance and the Insurance of Buildings under Construction.
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