- Compulsory insurance is insurance that must be legally purchased in order to participate in a particular activity, such as vehicle insurance and driving a car.
- Workers’ compensation and professional liability insurance are two more types of mandatory insurance.
- Compulsory insurance is a sort of insurance that protects accident victims against the costs of recovery.
What is the compulsory insurance?
The Employers’ Liability (Compulsory Insurance) Act of 1969 guarantees that you have a minimum amount of insurance coverage in the event of a claim. Employers’ liability insurance will cover the cost of compensating your employees for injuries or illnesses that occur on or off the job.
What is compulsory and non-compulsory insurance?
According to Merriam-Webster, obligatory means “anything that is required or enforced,” hence non-compulsory insurance refers to a coverage that is neither required nor enforced.
What are the types of compulsory insurance?
The Unemployment Insurance Fund, Compensation for Occupational Injuries and Diseases, sometimes known as Workers’ Compensation, and the Road Accident Fund are the three main types of obligatory insurance.
Motor third party insurance:
Vehicle owners and drivers must have this insurance. Motorcycles, as well as other commercial and private vehicles, are included. Section (53) of the Motor Vehicle (Third Party Insurance) Act of 1945 makes motor third party insurance mandatory.
It stipulates that the motor vehicle owner be covered for personal injury, property damage, death, and third-party incidents. This should also cover third parties in the event of an accident while driving the insured car.
Employer’s liability/ workmen’s compensation insurance:
This statute mandates that every employer contribute 1% of total monthly employee pay to the employee compensation fund as a minimum monthly contribution. The Nigerian Social Insurance Trust Fund is the fund’s home (NSITF). The Employee Compensation Act of 2010 protects it. This fund would be used to reimburse employees or beneficiaries in the event of a work-related injury, disease, incapacity, or death.
A fine of N20,000 or a year in prison is the penalty. For a first offense, the penalty could be N100,000 and a year in prison, with the penalty increasing to N100,000 and a year in prison for successive offenses.
Group life assurance:
Section 9 (3) of the Pension Reform Act of 2004 enables group life assurance. Every employer with more than 5 employees is required to acquire a life insurance policy for all employees. This insurance must be worth at least three times each employee’s annual total income. It applies to both private and public businesses and mandates that employees be reimbursed in the case of death, mental or physical impairment while covered by the policy.
A fine of N250,000 or a year in prison is the penalty. It could be either or both, depending on the circumstances.
Health care professional indemnity insurance:
All medical institutions are required by law to buy this insurance. These organizations must have a professional liability insurance coverage in place to pay patients or beneficiaries in the event of professional negligence. Section 45 of the National Health Insurance Scheme (NHIS) Act establishes it, and it applies to licensed health care professionals.
Occupiers liability insurance or insurance of public buildings:
This insurance mandates that all public buildings be insured in the event of a disaster. This encompasses property damage, bodily harm, and death resulting from an earthquake, collapse, storm, fire, or flood. The law designates public buildings as those that are open to the public for medical, commercial, educational, or recreational purposes.
Builders liability insurance or insurance of buildings under construction:
Occupiers liability insurance is similar to this. They differ, however, in that they apply to both contractors and building owners. The insurance Act of 2003 mandates builder’s liability insurance for structures with more than two stories. It protects workers and the general public against construction dangers and professional carelessness that could result in bodily injury, property damage, or death.
Aviation third party insurance:
It applies to aircraft operators and requires them to obtain insurance prior to flying. The insurance firm, aircraft operators, and third-party individuals are all covered under aviation third-party insurance. It provides compensation in the event that the aircraft causes property damage or death.
Marine insurance:
Individuals and organizations who use sea transportation on a regular basis must have this insurance. It was set up to compensate any losses that might occur as a result of marine operations and transportation.
Conclusion
Compulsory insurance is critical in Nigeria because it ensures that all parties are protected. It protects both employees and employers, as well as the general public, from unanticipated dangers and potential lawsuits. Here are some of the issues that Insurance in Nigeria is dealing with as a result of COVID 19.
What are the two types of compulsory insurance?
Insurance is required by law.
- If you own a car, you must have third-party personal injury insurance.
- Public liability insurance protects you from third-party death or injury and is required by law for some businesses.
What do you mean by compulsory and voluntary insurance?
This is a question that would undoubtedly emerge in the minds of many people. Why would someone choose a voluntary deductible when insurance companies already have one in place? The explanation is simple: voluntary deductibles lower your insurance price. This discount applies to the “Own Damage” portion of your insurance policy. The bigger the optional deductible you choose, the more the premium discount you will receive. You will not receive any premium discounts if you choose to have a mandatory deductible.
What is the importance of compulsory insurance?
The goal of requiring required insurance is to ensure that all relevant people and/or risks are covered. The purpose of universal health insurance is to cover everyone’s medical expenses, and mandatory auto insurance ensures that all drivers have the bare minimum of liability coverage.
Is insurance compulsory in India?
In India, as well as the rest of the world, having your car insured is a legal requirement, not a choice. Before a car can drive on the road, it must be covered by an appropriate insurance coverage, according to the Motor Vehicle Act of 1988. The Motor Vehicles Act of 1988 covers legal requirements such as car registration, having a valid driver’s license on hand at all times, and having insurance coverage. A vehicle must have at least third-party legal liability insurance before it may be driven on a public road as a minimum requirement in terms of insurance. A third-party legal liability policy will cover the expense of any legal obligations that may emerge if your car is involved in an accident in which a third person is harmed or property is damaged by a third party.
What type of insurance is compulsory for motor vehicles?
Under Section 374 of Presidential Decree (PD) No. 612, as modified, generally known as the “Insurance Code,” every motor vehicle owner as defined in RA No. 4136, as amended, is required to get a Compulsory Third Party Liability (“CTPL”) insurance coverage. 4.
What is a compulsory benefit act or law?
Many veterans are returning home with disabilities as a result of the more than ten years of war in Iraq and Afghanistan, some of which are latent and do not present themselves for years.
When a veteran qualifies for veteran benefits and also receives disability benefits through their private-sector employer’s group long-term disability insurance plans, the question of whether the disability insurers can coordinate the benefits and reduce their payment obligation by the amount of disability payments the insured receives from the Veterans Administration has arisen in several cases.
In recent cases, two courts of appeals determined that offsets of veteran payments are illegal where the policy is ambiguous.
The courts of appeals in Riley v. Sun Life and Health Insurance Co., 657 F.3d 739 (8th Cir. 2011) and Hannington v. Sun Life and Health Insurance Co., 711 F.3d 226 (1st Cir. 2013) concluded that veteran disability benefits are distinct from other types of disability benefits.
A district court in Kansas found in Holbrooks v. Sun Life Assur.Co. of Canada, 2013 U.S.Dist.LEXIS 156208 (D.Kansas Oct. 31, 2013), that Sun Life could offset veteran disability benefits.
In Holbrooks, the claimant for compensation was an anesthesiologist who had served in the Army for six years before being discharged with the rank of major in 2003. Dr. Howard Holbrooks went to work for a health-care provider in Kansas after his release and acquired long-term disability insurance as a benefit of his job.
Holbrooks was diagnosed with amyotrophic lateral sclerosis (ALS) later, and from August 2009 until his death in February 2013, he was eligible for disability benefits.
In 2008, Holbrooks was awarded service-connected disability compensation by the Department of Veterans Affairs. For any veteran who develops ALS after leaving the military, a VA regulation, 38 C.F.R. Section 3.318, establishes a presumption of service connection. After a study revealed that military veterans had a higher incidence of ALS than the general public, the law was enacted.
Despite the fact that Holbrooks’ eligibility to long-term disability payments was uncontested, the Sun Life policy under which he was insured includes a provision that offsets any “other income benefits” against Sun Life’s payments, a term that included:
- 6. The Social Security Act, or any equivalent scheme or act, disability or retirement benefits…
Sun Life argued that VA benefits were “Other Income Benefits” under paragraphs 1(d) as originating from a “Compulsory Benefit Act or Law,” and 1(f) as arising from “any other act or law of like intent,” and that they were used to offset payments from the Department of Veterans Affairs. The judge agreed with you.
VA benefits are “disability benefits deriving under a ‘Compulsory Benefit Act or Law,'” according to the court.
The court came to this result after determining that VA benefits are “‘compulsory’ in the sense that the VA is’required’ by law to furnish them.” (American Heritage Dictionary of the English Language, 274 (New College Ed. 1978), citing American Heritage Dictionary of the English Language, 274 (New College Ed. 1978)).
“Veteran’s disability benefits are non-discretionary, statutorily mandated benefits,” the court noted. Cushman v. Shinseki, 576 F.3d 1290, 1297 (Fed. Cir. 2009) (quoting Cushman v. Shinseki, 576 F.3d 1290, 1297 (Fed. Cir. 2009)) The court also referenced a regulation that “guarantees disability benefits to soldiers who develop ALS.” The court also found that the VA benefits could be offset under the provisions of a “Workers’ Compensation Law” or other legislation “with like intent.”
The objective of workers’ compensation is “closely connected” with the intent of the Veterans Benefit Act, according to the court.
Sun Life’s careless drafting gets rewarded with this decision. Sun Life could easily have stated in its policy that it planned to offset VA benefits.
Just because the insurer now wishes the policy had been worded differently does not imply a court should grant that wish.
This ruling is shocking, especially since it comes on the heels of two recent appellate decisions involving the same insurance company and the same provision, especially in an era when public policy favors that our society take better care of those who faithfully served our country and defended our freedom.
A compulsory benefit act or law is one that mandates the inclusion of mental health coverage in group health plans, such as the one at issue in Metro.Life Ins.Co. v. Mass., 471 U.S. 724 (1985).
These laws are often interpreted to apply to benefits that employers are compelled to provide to their employees, rather than to rules that apply to everyone. Workers’ compensation is also not comparable to the VA benefit because workers’ compensation is granted under state laws that require businesses to compensate employees who are injured on the job or develop occupational illnesses.
Workers’ compensation benefits differ from VA benefits in that, unlike workers’ compensation or Social Security disability, VA benefits are not a “insurance” program, but rather, as Riley pointed out, “are considered obligatory compensation for injuries to service men and women while on active duty.”
VA payments are also distinct from workers’ compensation and Social Security benefits in that they are unrelated to rank, length of service, or money earned while serving.
Furthermore, unlike Social Security payments, VA benefits are paid by Congress rather than a levy. Furthermore, unlike Social Security or workers’ compensation, where the claimant must prove entitlement to benefits, the VA’s eligibility rules are designed to “give the claimant the benefit of the doubt.” Section 5107 of the United States Code (b).
The 10th U.S. Circuit Court of Appeals should review its decision due to the lack of unambiguous wording allowing for the offset of VA benefits.