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Compulsory Insurance Products And You

The National Insurance Commission, NAICOM, in 2010 came up with the Market Development and Restructuring Initiative, MDRI, as part of efforts to boost insurance penetration in the country. Part of the objectives of the MDRI is to enforce the compulsory insurance under the Insurance Act of 2003. But so far, greater number of the general public is yet to buy into the initiative.
The reason is not farfetched. The Nigerian public to a very large extent has a negative perception about insurance. Although the sector is changing for the better, it has not been easy to convince Nigerians.
Unfortunately though, this poor perception is negatively affecting the growth of the sector, it is high time Nigerians began to see insurance in a new light.
Oftentimes, Nigerians say that there is no value attached to insurance, but the truth is that insurance offers a lot of value.
Take for instance, people think that putting on the seat belt in a car is to prevent law enforcement agents from arresting them, whereas the purpose is to save lives.
There is no gainsaying the obvious that the loss of confidence from the general public in the insurance sector is as a result of indiscipline.
Insurance operators on their part, know that indiscipline and unprofessionalism have impacted negatively on their businesses over the years, as such, are employing all positive means to win back the confidence of the general public.
An insurance practitioner once said “We insurance practitioners are not disciplined professionals and as long as we remain indisciplined, some of those practices that we come out and criticise openly and go back to privately will continue.”
The compulsory insurances
Compulsory insurances are those classes of insurance made compulsory by law, with the objective of providing protection to third parties and the general public. The following types of insurance are compulsory in Nigeria:
. Builders Liability – under the Insurance Act 2003/under the Lagos State Building Control Law 2010
. Construction All Risks
. Occupiers Liability – under the Insurance Act 2003 and Lagos State Law
. Employers Liability – (Group Life) – under the Pension Reform Act 2004
. Healthcare Professional Indemnity – under the NHIS Act 1999
. Motor Third Party Liability – under the Insurance Act 2003
Builders Liability Insurance
This type of insurance requires that all owners or contractors of buildings under construction (more than 2 floors), must purchase to provide compensation in event of bodily injury, death and property damage to workers at construction sites and affected members of the public in the event of 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 are the penalties provided under the federal and Lagos State laws.
Occupiers Liability Insurance
This type of insurance requires that all owners or occupiers of public buildings, whether private or public, to provide under the National Insurance Act 2003 and the Lagos State Building Control Law 2010. A “public building” is any building that is not 100 per cent used by the owner for residential purposes. Public buildings include tenement houses, hostels, residential buildings occupied by tenants, lodgers or licensees, and any other building to which members of the public enter and exit for the purpose of educational, recreational or medical services (e.g. schools, cinemas, hospitals, malls, petrol stations, etc).
Occupiers Liability Insurance provides compensation in events of bodily injury, death and property damage to the business users and members of the public in the event of building collapse, fire, earthquakes, storm or flood. The penalty for non-compliance is N100, 000 plus one year imprisonment, and sealing-off or demolition of the building under the federal and the Lagos State laws.
Employer’s Liability (Group Life) Insurance
This type of insurance requires that all employers of labour with more than four employees are required to have under the Pension Reform Act 2004. The law requires the employers have insurance that will provide for compensation in the event of death, disappearance, disability, or critical illness suffered by staff while in service and to subsidize pension provision in the event of mental or physical disability.
This law applies to both public and private sector employees. This means that employees (and their families) have the right to demand compensation and payment from their employers in the event of injury or death. The penalty for non-compliance with this law is N250,000, record of conviction, and in addition the place of business may be sealed up.
Healthcare Professional Indemnity Insurance
This type of insurance requires that all licensed health care providers and medical practitioners (such as doctors, nurses, pharmacists, etc) are required to have under the National Health Insurance Scheme (NHIS) 1999. The law have insurance that will protect their patients in case of accidents or fatalities (death) resulting from professional negligence.
This type of insurance 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 Health Care Providers. The penalty for non-compliance with this law 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
This is the minimum insurance that all owners and drivers of motor vehicles, motorcycles and special type vehicles plying the Nigerian roads are required to have under the National Insurance Act 2003. The third party motor liability insures the motor vehicle against liability as to death, bodily injury or damage to property of a third parties arising from the use of the vehicle. The penalty for non-compliance is a fine of up to N250,000 plus one year imprisonment.- Culled from the Vanguard

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