Compulsory Builders Insurance: 3 Lessons from Ikoyi Building Collapse

compulsory builders insurance

The Compulsory Builders Insurance, also known as the Builders Liability act, was enacted to protect the public from cases of building collapse, injury and death at building construction sites.
In Lagos State, under the 2003 Insurance Act of Lagos State Building Control 2010, owners, contractors, developers are compulsorily mandated by law to have an insurance policy coverage for buildings higher than two floors. However, recent incidents reveal that compliance is a far cry from actualisation.

In particular, the Ikoyi Building Collapse, a sad event, has re-invigorated the call for full compliance of Compulsory Building Insurance by stakeholders across Nigeria. The tragic event took place on November 1st 2021, a high-rise under construction in Ikoyi, Lagos-Nigeria collapsed, and over 40 people have been reported dead.

A Vanguard Nigeria News report alleged, “How developer ignored the directive to insure property”. According to the report, the Lagos State Building Control Agency (LASBCA) gave a directive to the deceased Estate Developer, Mr Femi Osibona, to get an insurance cover for the building as required by law, during the construction of the now collapsed 21-storey building on Gerrard Road, Ikoyi-Lagos. So, what are the lessons we must learn from this incident?

3 Lessons from Ikoyi Building Collapse

1. Stakeholder’s Full Compliance: Owners, developers and contractors must adopt full compliance with the law and stop seeing insurance as an afterthought for something that might happen or not happen.
Compliance with such laws protects your workers and the building owner from lawsuits and cushions financial loss in the event of an accident. Indeed, insurance will not stop accidents from occurring. However, it can ensure that quality materials and standards are maintained by all parties involved for the entire cycle of the building project and beyond.

2. Government Agencies Re-Invigorated Will For Compliance: Government agencies and their leaders must have accountability and re-invigorate will to ensure stricter and full compliance of the compulsory builder’s insurance act in Lagos and as applicable across other states in Nigeria.
Many observers have lauded or criticised Governor Babjide Sanwol-Olu’s suspension of Mr Gbolahan Oki, General Manager of the Lagos State Building Control Agency. Whichever side you choose to support, one big question that needs answering is how many of the high-rises under construction are insured as the law provides across Lagos and Nigeria?
Reiterating this, the Director-General of Nigeria Insurers Association, NIA, Mrs Yetunde Ilori, said, “This is not the time for blame games, but sober reflection and a call to action. Those vested with the power to enforce the laws of the land owe it a duty to ensure that laws are obeyed”.

3. You Have a Role to Play: In truth, we must tell ourselves that as members of society and be held accountable, every one of us has a role to play in stricter compliance to laws that protect everyone. Accountability can help Lagosians and Nigerians avoid a sad incident like the Ikoyi building collapse on November 1st at Gerrard Road, Ikoyi Lagos.
Mandatory insurance laws like compulsory builders insurance protect stakeholders organisations in the sector and their investment. Every one of us has an obligation to the industry and industry to obey the laws and do what is right. Our thoughts go out to everyone affected directly and indirectly by the Ikoyi Building Collapse incident.

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