Insurance World

#EndSARS: Insurance Firms May Pay Claims If Cover Extends To Riot And Commotion, Says Experts

BY NKECHI NAECHE-ESEZOBOR-Less than a week after the shooting of #EndSARS protesters at Lekki tollgate in Lagos by men of the military, experts in the Insurance industry have reassured policyholders that the industry is committed to paying claims to those who were affected by the protest.

Parts of Lagos and other cities in the country had witnessed some form of burglary attacks, several vehicles, buildings, and properties set ablaze or looted by thugs since the wake of the shooting and subsequent curfew following some states directives.

According to investigation carried out by BusinessToday Online States and federal government properties, banks, shopping malls, media houses, toll plazas, private offices, shops were not left in the destruction.

Ben Ujoatuonu, expert and managing director/CEO, Universal Insurance Plc said insurance companies will pay for every cover that extends to riot and commotion, but will not pay for covers that excludes riots and commotion.

He said: “it depends on the cover the company or individual has bought. If the policy excludes riot and civil commotion, then the insured will not receive any indemnity from his insurance company.”

He however said that some policies may have been extended to cover riot and civil commotion, in such situation liability will attach.

He further said that most of the companies that arranged their insurance through BROKERS, there is every likelihood that they would have bought such extension.

The Universal boss who also frowned at the situation in the country, acknowledged that is not the best of time for the insurance industry in Nigeria especially after the covid -19 paramedic which affected global businesses.

When asked if covers not extended to riot and commotion can get any form of compensation from insurance, Olaotan Soyinka, managing director/ CEO of Sovereign Trust Insurance Plc, noted that in the commercial aspect of the trade, each company is at liberty to act according to her policy on ex-gratia payment.

This according to him is paying a claim not on the merit of the circumstances because there has been no claim according to the terms of the policy but for some extraneous reasons the company decided to pay some token.

The STI Boss was of the opinion that governments can also come to the aid of those who suffered losses either directly or through the insurance industry,

He however reaffirmed that claims will surely be paid if extension on the policy to cover riot, strike and civil commotion. Otherwise, such losses are not covered.

Benjamin Agili said with the latest development most underwriters will begin to exclude riot & strike and writing it back into the policy will now be very expensive.

On compensation, the Royal Exchange General Insurance Managing Director, said covers with extension of riot & strike would be paid their claims.

Ademayowa Adeduro, MD/CEO Law Union And Rock Plc said that based on the low level of insurance density in Nigeria most of the those that lost their lives and properties may not have cover for life or property insurance.

He explained that some of the shops looted and public and private buildings set on fire if they do have insurance, compensation will depend on investigation to be conducted by loss adjusters in line with terms and conditions of the polices.

He further said with the massive nature of destruction which may likely run into hundreds of billion of naira, the Insurance Industry most likely going to demand for government bailout or incentive to be able to cope with the envisaged claims.

According to him the bailout may come inform of cash bailout, tax incentive or medium to long term low interest loan.

The National Insurance Commission (NAICOM) had said that Insurance companies paid non-life insurance claim of N64 billion in 2018 against N56.4 billion in 2017.

The commission further said that out of this total, claims on fire insurance were about N9.1 billion while Motor Vehicle was N17.3 billion.

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