The Lagos State Government through the Lagos State Safety Commission recently expressed its intention to make it mandatory for all building owners in the state to insure their properties. Relying on the state’s Insurance Law of 2003 which has remained unenforced for some time, the Director General of the commission, Hon. Hakeem Dickson, said that implementing the policy would go a long way in addressing issues relating to compensation of victims of building collapse in the state. In this poll, safety professionals express their views on the workability of the policy. Excerpt.
Oluwakemi Eboda, CRO, Event Basics Ltd
It is wonderful. The bedrock of safety is embedded in insurance. Safety is freedom from harm. But we all know that it is not possible for us to totally eradicate hazards or risk. To totally eradicate accidents is not possible. We cannot say that we live in an accident-free environment. So one thing we do as human beings is to prevent these accidents. But there are some situations whereby the act of God supersedes and then accident will occur. But without insurance, when such accidents happen one will not be able to effectively cushion the impact of such incident, so that at least the victim will be compensated and the person that was also negligent will be able to access succor. When we say that we have implemented safety measure, without insurance, it is not complete.
Segun Bakare, HSE Advisor at Petrolex Oil and Gas Ltd
It is one thing to have a policy it is another thing to implement it. But the determinant of the policy is how effective it is in performing the function for which it was stated. The reason why I’m saying this is that in the same law, vehicle insurance is also there. But we all know that even vehicle insurance, you can do it with your eyes closed. I have been driving for years now. If my car gets damaged, which insurance company takes care of that, even though I was bashed? So it is not just to implement policy. This is more of a punitive approach and using a punitive approach works at times but at times it doesn’t work. It’s a good initiative; I’m not trying to say otherwise but the major thing is about implementing the building policy because we are talking about risk management. We are trying to protect the public. We are trying to protect tenants whether in your house or in a rented apartment. Lagos state government is trying to protect them. The initiative of the risk aspect that they are trying to focus on is all about transferring the risk. Insurance is a risk transfer method. We are just transferring the risk instead of eliminating. We can transfer risk by two things, by contracting it out for a contractor to build for you. The contractor inherits the risk, he will be held liable. And also for insurance, the risk is also transferred – certain premiums are being paid if there is any damage. After inspection, you can lay claim. But the major thing is that we all know that when the government implements a policy, people will always find a way around. There are still some people that will go at their back and do it for a lesser amount. Then at the end of the day, we defeat the purpose. Do they have the capacity to carry out this major work? This is the question we should sit down and ask ourselves. The approach is good but it is coming late because I believe we are putting the cart before the horse. We should be talking about risk elimination, not risk transfer. If we can eliminate it, we can reduce it. One of the ways we can reduce it is by checking every engineering company that is been contracted and ensuring that every engineering company to do some certain building work are trained and certified by the government and by safety consultants that are working hand in hand with the Lagos State Safety Commission. Another way is to ensure building plans are approved. And during the building process, we have inspectors that are coming from time to time to ensure that standards are being followed. This is all about risk elimination not risk transfer. Lagos State Safety Commission is going through the approach of risk transfer. Risk transfer will not do any good. Risk transfer will only come in place when you have already exhausted all your risk methodology. So we need to go back to the drawing board. We need to approach the risk in a sufficient and suitable way and will reduce risk as low as reasonably practicable.
Dominic Aigbogun, Vice President, Fire Protection Association of Nigeria (FPAN)
I think it is a good development. It is achievable. Not only with fire prevention officers; we have people in the local government areas who will be going around to see that insurance policy is achievable. It is in the interest of building owners. If there is insurance, you can be sure of a recovery. If there is no insurance policy, they will have to bear the loss and repair the damage. It is in the interest of building owners that we have insurance policy.
Engr. Timothy Iwuagwu, Chairman, ISPON, Lagos Branch
We asked a question and nobody has given an answer to that. If a tanker drives into a street and falls down and oil spills into the gutter and there is a fire and the fire continues through the drain and affects houses and there is fire destruction, the question is who pays for all these? Nobody has been able to give us an answer for that. The plan by the Lagos State Safety Commission should be subject to serious scrutiny from stakeholders. Lagos is filled with so many buildings and somehow there has been poor urban planning. You see residential areas, commercial areas clogged together in the same place. It is a good plan to insure all houses but it will be quite difficult due to the much congested horizon.
John Obajinmi, HSE Coordinator, Nigerian Electricity Management Services Agency (NEMSA)
Insurance is part of safety and to ensure that safety is performed to the optimum, there has to be some level of insurance. It is all about preparing for the unexpected. So the owner of the property or the beneficiary of insurance or an injured person will be able to have a leverage to continue managing and enjoying their lives. Now the second side of it in insurance is- at what cost is it coming to the owner of the property? If the ordinary people who can hardly feed now have to be forced to do extras in the name of insurance, the government will need to review that properly because it may not stand well for people who are struggling to live. I don’t know if it is possible for the government to put insurance according to ranking of buildings or maybe you are building in an area like Lekki.
Ehi Iden, CEO, Occupational Safety and Health Managers
It is an ambitious one. If they can achieve it, good; but it is too ambitious. There are so many houses in Lagos state. They can try but they may not be able to achieve to maximum. As regards the late enforcement of the law, the government needs to look back and find out what caused it; or the circumstances around it then. It is a good goal but it is too ambitious.
Patrick Adenusi, Initiator, Safety Beyond Borders and Road Safety Expert
All houses in America are insured. It is a good one. Insurance companies are lying down and waiting for the government. They should talk to their customers. They need to market their products. Insurance companies should encourage people to insure their lives, buildings and properties; if not they will get minimum patronage. Before a law can be enforced, there is need for proper awareness to be created. Imagine a car bought for millions being insured for as little as N6000. They are going for smaller premiums because there is poor awareness. Insurance companies are relaxed because they are seeing free money. They should create more awareness. Let’s say there are about 100 million houses in Lagos, how many are insured?
Fyneray Mbata, SHE Manager, MTN Nigeria
One has to consider the usefulness of insurance in risk management. Insurance is important in risk management. But that is when there is proper cover and there will be some indemnities. I think it is a very good initiative and I should also think that before that initiative is brought out, some proper ranking and categorizations must have been done such that all papers of buildings and ownership will be factored in. It is a thing that can be achievable, meaning that every person will be able to pay according to the type of property he has and according to the type of insurance coverage. This is such that whatever happens the person would be able to recover. If we have a fire incident, the people that suffer it are those who are not covered. So it is made compulsory – one, for the role of guaranteeing protection and insure that the future risk is managed and properly provided for all and sundry both those who have and those who do not have. I think if it is made compulsory there will be a kind of pool – insurance pool. Insurance pool will guarantee all the risk that will be affected in the neighborhood to be properly managed and taken care of. What I advise the state government to do is ensure that all manners of property are properly ranked and categorized; so that those who don’t have much will be able to pay as per what they have and what they can pay so that everyone will benefit equally.
Fayo Williams, Executive Director, Rely Supply Ltd.
The idea by Lagos State Safety Commission to make insurance policy compulsory for all buildings is a good one. However, there should be a lot of enlightenment on the benefit of insurance and the citizens should be made to understand that in doing it, you will provide succor in case of loss. And such loss could involve fire, building collapse or flood. I believe that insurance is an important issue that must be adhered to, so that people do not lose everything to an unpleasant occurrence. In my own case, I have been compensated at two different times. And in most cases the insurance will complement it and they made good of their insurance cover and I was paid in full, although there are necessary deductions which are always there in the insurance agreement. Therefore, it is very important for everyone to take insurance as a common sense issue which they can embark upon.
Samuel Jaja, Operations Supervisor, African Circle PM Ltd
The insurance of a thing must fit. Especially for those who own buildings for commercial purposes because if it is for commercial purpose, it means you will be paying your insurance premium depending on your agreement with your insurance company. Certain percentage will go to them at annual insurance premium. But if it is a building that is not meant for commercial purposes, maybe a tenantless retiree who is just the sole owner, it will be a heavy burden on him. How will he get money to pay the insurance premium? The government has not had the political will to implement it all this while. But due to the consistent incidents of building collapse. I believe that was what compelled the government to implement the law.