EndSars Brouhaha: Insurance Lessons

ENDSARS BROUHAHA: INSURANCE LESSONS

The End SARS movement of October 2020 is a stark reminder of the power of collective action and the fragility of peace. It’s been three years since the event, and the scars left by them still linger especially in the hearts of people that were negatively affected. As I reflect on the aftermath of the protests, one thing resonated in my heart: the need for adequate insurance coverage in times of crisis.

During the End SARS protests, what started as a peaceful demand for justice and an end to police brutality suddenly descended into chaos. Hoodlums hijacked the movement, resulting in the loss of vibrant innocent youths and the widespread destruction of properties running into billions of Naira. Government buildings and vehicles were the most affected, lives were lost and businesses were ravaged, leaving a trail of devastation in the country. Many are still grappling with the financial and emotional toll of those dark days up till now.

But amidst the chaos, lessons were learned about the importance of being prepared for the unexpected. One of the key takeaways was the need for riot insurance coverage among others. Unfortunately, some policyholders who suffered losses during the protests were unaware of riot insurance coverage or they failed to include it in their policies.

For better insights into the role of insurance in times of crisis, I will cite some live cases of claims presented from the aftermath of Endsars and insurance responses to them. I will be careful not to reveal the parties’ identities to preserve their privacy.

A bank staff car was burnt by hoodlums within the bank’s premises.

He reported that his car was left in the office the Friday before the incident because he could not return to the office after an outside engagement. His motor insurance policy was on ‘3rd party cover only’. 3rd party insurance provides cover against the insured’s liability to the third party up to an agreed limit, hence damage done to the banker’s vehicle was not recoverable under his policy. Regrettably, the vehicle was a total loss. It was completely burnt down. In light of recent economic challenges, records show that third-party coverage has become increasingly desirable for many. Indeed, it may seem plausible, yet such a decision could lead to a lifelong regret when the unexpected happens. For many, year 2020 started with very high hopes and aspirations with no inkling of the various disasters that came with it. such as covid, and the swine fever epidemic among others (stories for another day).

Journalist vehicle and a third party damaged fence

This happened as the journalist in confusion was scampering for safety away from the hoodlum onslaught. He accidentally ran into a 3rd party’s building and damaged both his vehicle and the fence. Thankfully, the journalist had a comprehensive insurance policy that was extended to cover riot, strikes, and civil commotion. The journalist got full compensation from his insurer for both his vehicle and the damage caused to 3rd party fence. Always ensure you ask for the available additional optional covers on your motor insurance policy. If the journalist’s comprehensive insurance cover was not extended to cover riot, he would have been denied compensation both for himself and the 3rd party. Please let us be guided in our purchase decisions.

Government properties, including commuters’ buses, were badly burnt and damaged.

The insurance premium was not paid at the time of the event, so the insurance claim was denied due to non-payment of premiums. Section 50 of the 2003 Insurance Act is clear on the position of insurance and non-payment of premiums.

Section 50 of the Act states: that the receipt of an insurance premium shall be a condition precedent to a valid contract of insurance and there shall be no cover in respect of an insurance risk unless the premium is paid in advance.

Shop with very expensive and exotic items in a shopping mall in Lekki was burnt by hoodlums.

The shop owner found herself unprotected as her policies had lapsed unknown to her. She claimed she was not served a renewal notice before expiry, leaving her without insurance cover at the time of the incident. Again, under section 50 of the 2003 Insurance Act, premium payment is a condition precedent to liability. Therefore, Since the premium was not paid, no cover and no compensation would be given. 

However, beyond the letters of the policy terms and conditions, insurers sometimes may decide to show flexibility and compassion. After a considerable appeal for compensation by the insured, her insurer reconsidered their position and agreed to exgratia compensation as an honest omission was perceived considering the payment history of the insured. Exgratia payment is not a right. It simply means payment of grace without liability. It is a gesture of goodwill, recognizing the longstanding relationship and credibility of the insured.

Insurance response to this case is not the rule and therefore should not be taken as precedence. Also, the amount offered for settlement was strictly at the insurance company’s discretion. Please note that it is not a right but gratis. I guess, this is the beauty of being a loyal customer.

Injury to security man on duty by hoodlums at a shopping plaza in Abuja

Thankfully the insured had a group personal accident policy covering all staff including the security personnel and the cover was extended to cover riot. The cover was active as at the time of the incident and compensation was duly paid by the insurance company for medical expenses and temporary disability for the period he was absent from duty.

Damage caused to a vehicle by Hoodlums in the heat of the chaos

The insured had a comprehensive insurance policy on his very expensive car but there was a contention concerning the amount offered for settlement due to the application of a clause in the policy. The insured had an Excess clause on her policy. An excess in an insurance policy is simply the first part of the claim an insured or claimant pays before the insurance company steps in. The insured is at liberty to buy an excess-free policy by paying a little extra for it. Again, always ask your insurance agent or broker what your insurance policy covers, the exclusions, applicable limitations, and additional covers available. The insured claim computation is as noted below.

This insured policy had an excess of N100,000 or 10% of the claim whichever is higher.

The claim amount was N1,200,000

10% of the above claim amount was N120,000

Therefore, the applicable excess was N120,000 because it is higher than the corresponding N100,000 stated in the excess clause above.

Claims Calculation

Adjusted Claim Amount   N1,200,000

The claimant pays                                          N    120,000

The insurance company pays                          N 1,080,000

Total claim payment                                     N1,200,000

The policyholder was dissatisfied with the compensation offered because he did not fully understand how the excess clause works. It is worth noting that you have the option to purchase the excess with the payment of additional premium. “This will enable the insurance company fully settle your claim without requiring your involvement.”

It’s important for policyholders to carefully review their insurance policies to understand what is covered and what is excluded. In cases where coverage for riots or other specific events is desired, policyholders have the option to purchase these additional covers to extend their protection at an additional cost usually not so significant. Having the right covers in place can make all the difference in times of crisis.

As I conclude on these cases, I would like to briefly highlight various insurance policies, I consider needed for protection in any event similar to the Endsars crisis.

1. Property Insurance:
   • Scope of Cover: Typically includes cover for damage or loss to buildings, contents, and other physical assets due to perils like fire, theft, vandalism, and riots if included.
   • Exclusions: Some policies may exclude coverage for damage caused by riot, war, civil commotion, or acts of terrorism. Additionally, coverage may be limited if the property is vacant or unoccupied for an extended period.
2. Business Interruption Insurance:
   • Scope of Cover: Provides coverage for lost income and additional expenses incurred when a business is forced to suspend operations due to the operation of an insured peril, such as property damage.
   • Exclusions: Common exclusions may include losses resulting from riots, civil unrest, or acts of terrorism unless specifically endorsed or included in the policy.
3. Motor Vehicle Insurance:
   • Scope of Cover: Offers protection against damage to or loss of vehicles due to accidents, theft, fire, and other perils, as well as liability coverage for bodily injury or property damage caused to third parties.
   • Exclusions: Some policies may exclude coverage for damage caused during riots, strikes and civil commotion or acts of terrorism unless additional coverage for such perils is purchased.
4. Personal Accident Insurance:
   • Scope of Cover: Provides financial compensation in the event of accidental death, bodily injury, or disability resulting from covered accidents.
   • Exclusions: Coverage may be limited or excluded for injuries sustained during civil unrest, riots, or acts of terrorism, depending on the terms of the policy.
5. Liability Insurance (e.g., Public Liability, Employers’ Liability):
   • Scope of Cover: Protects businesses or individuals against claims for bodily injury or property damage arising from their negligence or legal liability.
   • Exclusions: Policies may exclude coverage for liability arising from intentional acts, criminal activities, or events deemed to be outside the scope of normal business operations, such as riots or civil unrest.

Policyholders are advised to review their insurance policies carefully, understand the scope of cover, and be aware of any exclusions that may affect their ability to claim for full compensation for losses incurred.

As we reflect on the stories of businesses and individuals impacted by the EndSars turmoil, it becomes evident that insurance plays a crucial role in providing financial protection and peace of mind during times of crisis.

Let us use these lessons to take proactive steps toward safeguarding our future. Whether reviewing and updating existing insurance policies, exploring additional coverage options, or increasing awareness about the importance of insurance within our communities, every action we take today can make a difference tomorrow.

Together, let’s build resilience, empower others with knowledge, and ensure that we’re better equipped to weather any storm that comes our way. Because when we invest in protection today, we’re investing in a brighter, more secure future for ourselves and those we care about.

Now is the time to act. Let’s take the first step towards a more resilient tomorrow.” Tomorrow is the most uncertain in life endeavours.

Stay tuned for a unique, exciting, yet educative upcoming episode. Q & A: Common Insurance Myths debunked. Please prepare your questions and stories ahead and leave them in my comment section below so we can all benefit from your experience.