Property Insurance: Fresh Fear Grips Building Owners

Stakeholders in the building Industry have expressed fear over likely increase in prices of property, following the commencement of an Insurance Act that makes it mandatory for property owners or contractors to insure buildings of more than two floors in respect of construction risks.

Enforcement of the law which took effect on March Ist, this year makes it compulsory for owners and occupiers of public buildings such as hotels, hostels, hospitals, tenement houses and schools to insure them against hazards of collapse, fire, earth quake, storms and flood.

The law which was enacted eight years ago, is now coming under the compulsory insurance being promoted by the National Insurance Commission (NAICOM), and only exempts private dwelling that is occupied solely by the owner for residential purpose or church as well as mosque.

Speaking on the matter, the chairman, Sparkling Group of Companies, Engr. Toyin Adeyinka, said that the initiative by NAICOM to begin verification and enforcement of Compulsory Builders Liability Insurance for building of more than one storey is a good step, but needs to be well implemented in order not to affect property prices negatively.

“We all know that property developers and owners will add insurance premium and mortgage fees to the cost of a property, and this will not benefit mass housing projects which are meant to come cheap,” he said.

On his part, the vice chairman of the Nigerian Institute of Architects (NIA) Lagos State Chapter, Olufemi Shodunke stated that the public needs to know the financial implications of this policy in terms of cost to property.

He also remarked that such policy will ensure health, safety and welfare of building works.