By Francis Ewherido
Two separate fire incidents on Friday, January 12, 2018, made me very depressed. One, I was driving down Adelabu Street, Surulere, Lagos, when I saw part of the former PHCN office in smoke. Unknown to me at that time, the supermarket and three business centres behind the building were also affected.
In the afternoon, same day, I was already late for an appointment with a friend, former school mate and Chief Executive Officer of American Business Council, Mrs. Margaret Olele, when I noticed an unusually heavy traffic on Eko Bridge as I approached Apongbon. I was wondering what could cause the traffic at that time of the day when I noticed heavy smoke ahead. By the time I got there, a medium-sized bus had been burnt beyond redemption. At least five families lost a source of livelihood in both incidents.
Losses are bad at any time, but to lose your source of livelihood at the beginning of the year, with so many bills snapping at your feet, is a very tough way of beginning the year. For all the affected individuals, it was certainly a black Friday. Accidents and disasters will always befall humankind, whether or not you accept it or reject them as “not my portion.” So you have an obligation to protect the assets you have laboured very hard to acquire. The first line of defence against such losses is good housekeeping which includes having a fire extinguisher in your vehicle, house and office. Most fires except, explosions, start like a candle light. At that point, a fire extinguisher can put it out.
The vehicle that got burnt probably did not have a fire extinguisher, or had a non-functioning one. The only reason many motorists keep fire extinguishers is to get the police and road safety officials off their backs. If you are one of those with this mindset, please know from today that your fire extinguisher is one of your first lines of defence to protect your assets against losses arising from fire. Consequently, your fire extinguisher should be functional, not just an item to show law enforcement agents. In addition, it should be serviced regularly (every six months or annually, as the case may be).
But the case of the shop and business centres could be different. The fire could have started after the close of business, in which case a fire extinguisher is useless. In fact, it will also be consumed in the inferno with other items. This brings us to the next line of defence: INSURANCE. You should have a material damage (fire and special perils) insurance to protect your assets. The policy covers the regular, every day kinds of fire likely to happen in our clime, but not when the policy holder deliberately sets his asset on fire. Special perils include storm and flood damage which are common in Nigeria. The rates are relatively low compared to the value of assets at risk. For instance, it costs less than N100,000 per annum in premium (money paid to procure the insurance) to secure a building, with the contents, of N40m. Landlords can build the insurance premium into the tenants’ rents. The tenant can also insure the building where the landlord has not done so. His tenancy confers insurable interest on him, while ownership of the contents in the building automatically gives him legal right to insure. Insurable interest is one of the six principles (pillars) of insurance and simply means legal right to insure. Other principles are utmost good faith, indemnity, subrogation, contribution and proximate cause.
For the owner of the bus, the insurance he needs to cover this loss is a comprehensive motor insurance or a third party, fire and theft insurance. The minimum motor insurance policy, which is compulsory, is Motor (Third Party) Insurance. It is an offence to put a motor vehicle on the road without having in place an insurance to cover your legal liabilities for death, bodily injuries and property damage to third parties arising from your usage of the vehicle on the road. But Motor (Third Party) Insurance, as the name implies, only covers third parties; it does not protect the owner in respect of damage to, or theft of, his vehicle. The third party insurance protection in theory is unlimited for bodily injuries and death, because you cannot place a value on life, but has a limit of N1m for property damage. You can increase the limit for property damage with payment of additional premium.
So, if all the owner of the bus had was a Motor (Third Party) Insurance, he is on his own and has to source for money to replace the vehicle. But if he has a comprehensive insurance or third party, fire and theft, he is covered. Comprehensive, as the name implies, is the most detailed form of motor insurance. It covers third party liabilities as detailed above and damage as a result of accident or fire to your vehicle. Third party, fire and theft policy is similar, but does not cover damage to your vehicle as a result of collision. The premium for comprehensive insurance is predictably the highest, but it is negotiable. The premium for third party, fire and theft is between 50 and 60 percent of the premium for comprehensive, but also negotiable. Third party premium is fixed; N5000 for private vehicles and N7500 for commercial vehicles.
Some members of the insuring public have had issues in respect of getting insurance policies, especially motor insurance, from genuine sources (in fact, it is alleged that only one out of every eight motor insurance policies in Nigeria is genuine. You can check the status of your motor insurance policy on the Nigerian Insurance Industry Database, NIID, using the insurance policy number or vehicle registration number), understanding the insurance contracts they enter into and processing their claims. These are no issues at all. The insurance industry has subdivisions; while the insurance companies, as underwriters, carry the risk of the insuring public, the brokers are the intermediaries between the insuring public and the insurance companies.
Everybody who wants to purchase insurance is advised to go through a Registered Insurance Broker (RIB). The list of registered insurance brokers is on the Nigerian Council of Registered Brokers’ (NCRIB) website. It is also on the National Insurance Commission’s (NAICOM) website. We (brokers) will help you to negotiate a better rate than you can ever do personally, we will structure your risk to suit your circumstances and budget, we will manage your risk portfolio for you and in the event of an incident leading to claim, we will process the claim and get your payment while you sit in the comfort of your home or office. The beautiful part is that all these services are FREE. You pay absolutely nothing because we get our payment (commission) from the insurance company for placing business with them. You have laboured to accumulate and sustain your assets; move a step further by protecting them via a registered insurance broker.