DEVELOPMENT CONTROL SET TO ENFORCE COMPULSORY BUILDERS’ LIABILITY INSURANCE

By: Larry Afu and Ruby John

The Department of Development Control, Abuja Metropolitan Management Council (AMMC), has assured the Association of Metropolitan Municipal Councils (AMMC) of full enforcement of the Compulsory Builders’ Liability Insurance (BLI) as stipulated in the Nigerian Insurance Industry Reform Act, 2025.

This assurance was given by Deputy Director, Development Control, Arch. Ajibade Olayinka, during a one-day training and sensitization programme organized by the Association of Metropolitan Municipal Councils (AMMC) in collaboration with the Department of Development Control. The event held on Wednesday, June 17, 2026.

The Nigerian Insurance Industry Reform Act (NIIRA) was passed into law in 2025. Lagos State, which has recorded multiple building collapses in recent years, has since commenced implementation of the Act.

In his presentation, Project Director Dr. Sammy Olaniyi said the insurance is mandatory due to the spate of building collapses that have caused deaths over the past decades. He explained that all buildings above one suspended floor must be insured throughout the construction period until completion and habitation.

Dr. Olaniyi added that the Act is designed to protect third parties and the general public, not the developer or building owner. It is aimed at curbing building collapses, ensuring compensation is readily available, and enforcing full compliance in the construction industry.

He warned that non-compliance attracts a penalty of ₦5 million, or 12 months imprisonment, or both.

The Act also provides for adequate compensation to persons who suffer injury or death in the event of a collapse caused by negligence or sharp practices by developers.

However, Dr. Olaniyi clarified that where a building under construction was properly insured, all standards met, and materials certified, but collapse still occurs, the developer can file a claim with the insurance company. In such cases, the insurance company must compensate affected third parties, such as workers on site and passers-by and properties, if affected by the collapse.