How Developer Of Collapsed Ikoyi  Building Serially Ignored Govt’s Directive To Insure Facility

*CHRIS EBONG LAGOS*

The trauma arising from the collapsed 21-story building on Gerald Road in highbrow Ikoyi, Lagos may not go away so soon. The accident will also continue to be a talking point in a very long time. One of the shocking recent revelations was that the over 43 victims were not covered by any form of the insurance policy.

According to Saturday INDEPENDENT investigation, there are strong indications that the recently collapsed 21-story building in Ikoyi, Lagos has no insurance coverage, a situation that would deny the families of the victims some form of compensation.

Insurance market information reveals that with N500 million or less insurance premium, if paid, could have covered the cost of rebuilding the collapsed structure, compensation for the third parties involved, including families of the deceased as well as the other properties affected by the disaster.

There are about three different insurance policies namely, the Constructors Liability Insurance, Insurance of Building Under Construction and of course, Group Accident Policies that, if purchased, could have compensated the victims and their families after the disaster.

Insurance operators under the auspices of the Nigerian Insurers Association (NIA) and its brokerage arm, the Nigerian Council of Registered Insurance Brokers (NCRIB) are still in for the likely insurer of the building, but no member from the two trade associations has claimed to be the insurer of brokerage intermediary to the project.

Although building insurance is part of the requirements for documentation and approval to construct such an edifice, insider sources said the contractors have little regard for insurance coverage, seeing the cover as a waste of money.

For a building of this magnitude, industry sources disclosed that the premium for All-Risks Construction Liability Insurance coverage is about one per cent of the entire building project, which invariably means the premium the owner of this building could have paid is about N500 million or less.

However, without insurance, it puts pressure on the Lagos State government to cough out funds, by all means, to compensate the families of the victims from the purse of the state, which ordinarily should not have been so, had the project been insured.

Similarly, the collapsed building whose contractor was Fourscore Heights Limited also had two other towers within the premises of the collapsed building, although the two towers are within the range of 16 floors. Sources, however, indicated that there is a high chance that the other two buildings may not have been insured as well.

Efforts to trace the contractor for reaction were unsuccessful as there was nobody linked to the contracting company, aside from the deceased boss. Efforts to contact the company through its website failed as the company had no website associated with it.

Ganiyu Musa, the chairman of NIA, said, “As of today, no insurer has notified the association of its involvement in the provision of insurance to the building.” He said the association had recently put in place an inquiry mechanism to ascertain whether members underwrote the building, he added that no member company had come up to the state that it provided cover for the building from then till now.

Similarly, the executive secretary of the Nigerian Council of Registered Insurance Brokers (NCRIB), Tope Adaramola, disclosed that no broker had so far notified the council of its involvement in the building project. He implored Nigerians to cultivate the mindset of embracing insurance which, he said, remains the best tool to mitigate risks.

Also speaking on the issue, Ben Ujoatuonu, the managing director/CEO, Universal Insurance Plc, said beyond the fact that there is a requirement for compulsory insurance, Contractor All-risks Liability Insurance would have covered all that happened.

The magnitude of the project, he said, requires that there should be Contractors All-risks Insurance in place which the principal ought to have required from the contractor that was erecting the fallen structure.

He stressed that “Contractors All-Risks would have covered the contract works, which are the building itself and third-party liabilities. You see that lots of people and adjoining properties were affected. All these things are covers that could have been provided by Contractors All-risk Liability Insurance. It is amazing this thing is happening. It also calls for the need for insurance in our daily lives. Nobody knows when it’s going to happen and how it will happen”.

Stating that accidents such as this could happen, which is why there is the need for insurance, he urged Nigerians undertaking any venture to buy the necessary and adequate insurance to provide cover against losses.

“This should be an eye-opener for Nigerians to procure the needed coverage, not only for themselves but for third-party liabilities as well. It is going to be humongous, economic, and accidental loss of wealth because when the government begins to talk about compensation to the families, the government is going to divert fund that is meant to be used for other developmental purposes into compensation and that is what insurance would have taken care of,” he pointed out.

“Insurance is the cheapest service you can buy. Considering the nature of that construction, I can tell you that if Contractors All-risk had been taken on that project, the contract work cannot be up to one per cent of the entire project value. So, how much is one per cent in terms of premium that will be able to take care of that level of liability or loss?”

Edwin Igbiti, the managing director/CEO, Niger Insurance Plc, regretted that such a huge project ought to have been insured, adding that if it had been insured, there will be no need for the state government to intervene in the compensation of the families of those affected by the loss.

He emphasized that “If Contractors All-Risks Liability had been subscribed to, insurance companies involved would have compensated the families of the diseased and all third parties involved as well as reconstruction of the collapsed buildings instead of putting this liability on government.

“This kind of emergency is also a burden on the government because it is not a liability it envisaged and made provision for in the budget,” he pointed out.

He urged all contractors handling building projects to take Contractors All-risk liability as there are lots of risks involved in constructing high-rise buildings.

The Nigerian Insurers Association (NIA), while earlier commiserating with the families of deceased victims, warned owners of public buildings to desist from the act of constructing high-rise buildings without the regulatory building insurance coverage. Building without building insurance coverage, according to NIA, means a violation of the insurance law.

About 43 people were said to have died from the recent tragic collapse of the 21-story building at Gerald Road, Ikoyi, Lagos.

Saturday INDEPENDENT gathered that Femi Osibona, the developer of the 21-story building who also died in the tragic incident, ignored a directive by the Lagos State Physical Planning Permit Authority, LAPPPA, to ensure the structure even when he was officially directed to insure the liabilities associated with the construction of the building.

According to the development permit no-DCB/DO/2442IV, dated 09/04/2019, the late Osibona was duly directed by the Lagos State government to insure the construction risks of the building but he apparently did not and found a way to continue with the project without the authorities stopping him.

The government has already suspended the general manager of the Lagos State Building Control Agency, LASBCA, Mr. Gbolahan Oki, an architect, and instituted an inquiry into the incident.