These insurance policies cushion your losses by law

By Kelechi Mgboji

At least six classes of insurance policies are compulsory by law, promulgated by the government at the behest of the National Insurance Commission (NAICOM), to give cover to third parties and the public in the event of hazards.

Insurance companies are paying out millions of naira in claims covering compulsory policies such as Builders Liability, Occupiers Liability, Employers Liability, Employees Liability, Healthcare Professional Indemnity, and Motor Third Party Liability.

It is regrettable, however, that most Nigerians are yet to explore these offerings created to cushion personal losses.

Even if the originating party refuses to take up an insurance policy, the beneficiary party is empowered by law to make claims for which the negligent party is liable.

Builders liability insurance

The owners or contractors of buildings more than two floors under construction are required to take up Builders Liability insurance policy under the Insurance Act 2003 and the Lagos State Building Control Law 2010.

This provides compensation in the event of bodily injury, death and property damage to workers at construction sites and affected members of the public following the collapse of the building and other construction risks.

The penalty for non-compliance is N250,000 plus three years imprisonment, record of conviction, sealing-off and demolition of the building.

Occupiers liability insurance

Under the Insurance Act 2003 and the Lagos State Building Control Law 2010, all owners or occupiers of public buildings, private or public, are required to provide occupiers liability insurance.

The policy provides compensation in the event of bodily injury, death and property damage to the business users, as well as to members of the public in the event of building collapse, fire, earthquake, storm or flood.

The penalty for non-compliance is N100,000 plus one year imprisonment and sealing-off or demolition of the building.

A “public building” is one not 100 per cent used by the owner for residential purposes.

It includes schools, cinemas, hospitals, malls, petrol stations, tenement houses, hostels, residential buildings occupied by tenants, lodgers or licencees, and any other building to which members of the public enter and exit for the purpose of educational, recreational or medical services.

Employer’s liability (group life) insurance

Employers of labour with more than four employees are required to have insurance policies for them under the Pension Reform Act 2004.

The law provides compensation in the event of death, disappearance, disability, or critical illness suffered by staff while in service, and to subsidise pension in the event of mental or physical disability.

This law applies to both public and private sector employees.

Employees (and their families) can demand compensation and payment from employers in the event of injury or death.

The penalty for violation is N250,000, record of conviction, plus the place of business may be sealed up.

Employee’s liability (workmen’s compensation) insurance

It focuses on factory workers (including domestic servants and apprentices) under the Workmen’s Compensation Act 1987, reviewed in 2007.

It provides compensation for workers who suffer injury, contract diseases or die in the course of employment.

Employees (and their families) can demand compensation and payment of medical expenses from their employers if they have injury, sickness or fatality while on duty.

It also protects the employer against the risk of large claims for injured employees. Violators will pay twice the amount that would have been paid as premium.

Healthcare professional indemnity insurance

All licensed healthcare providers and medical practitioners (doctors, nurses, pharmacists, et cetera) are required to have it under the National Health Insurance Scheme (NHIS) 1999.

It protects patients in case of accidents or fatalities (death) resulting from professional negligence, and provides compensation to patients and their relatives in the event of involuntary murder, disability, shock and injury suffered by patients as a result of the negligence of healthcare providers.

The penalty for violation is a possible revocation of licence by the National Health Insurance Council, a record of conviction, and sealing-off of the premises.

Third party motor liability insurance

The minimum insurance that owners and drivers of motor vehicles, motorcycles and special type vehicles are required to have under the National Insurance Act 2003.

It insures the vehicle against liability as to death, bodily injury or damage to property of a third party arising from the use of the vehicle.

The penalty for non-compliance is a fine of up to N250,000 plus one year imprisonment.