The Critical Role of Insurance in Ghana's High-Risk Fire Environment: Case of Ability Square, Adjiringano Incident

The fie incident at Ability Square on 14th November 2025 is a stark reminder of the financial fragility of commercial structures, especially in congested urban areas like Accra. With 3,595 fire incidents recorded in just the first half of 2025.

The property losses surging to GH₵188 million in the first half of 2025, more than triple the losses recorded in early 2024, confirms that the risk is not theoretical, but it is a frequent, devastating reality.

1. The Legal Mandate: Compulsory Fire Insurance

Crucially, in Ghana, acquiring fire insurance for commercial buildings is not merely an option but it is a legal requirement now

• Insurance Act, 2006 (Act 724): Sections 183 and 184 of this Act mandates that all owners or occupiers of private commercial buildings must have insurance against the hazards of Collapse, Fire, Earthquake, Storm and Flood.

   

• Third-Party Liability: The policy is also required to cover the legal liabilities of the owner or occupier for loss of damage to property, bodily injury and death suffered by any user of the premises or a third party.
• Compliance: The National Insurance Commission (NIC) is tasked with enforcing this, often requiring a conspicuous display of the Compulsory Fire Insurance Certificate.

The continuous occurrence of large-scale fires suggests a significant gap between the legal requirement and actual compliance and enforcement. For the structures affected at Ability Square, the presence or absence of this compulsory cover will be the single most critical factor in their ability to recover.

2. The Economic Necessity: Financial Catastrophe Prevention
The immediate and long-term financial costs of a fire far exceed the price of an insurance premium:

• Property and Inventory Loss: The GH₵188 million in property destruction highlights that an uninsured business is one fire away from total financial ruin. Insurance provides the capital necessary to rebuild the structure, replace equipment, and restock inventory.

   

• Business Interruption (BI) Cover: A standard Fire and Allied Perils policy can be extended to include Business Interruption (Loss of Profits) insurance. For the businesses gutted at Ability Square, this cover would replace the income lost during the months of reconstruction, ensuring the business can survive the downtime and pay fixed costs like staff wages while operations are halted.

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• Liability Coverage: Given the dense nature of the commercial enclave, the fire likely impacted adjacent properties. The compulsory insurance requirement ensures that the legal costs and compensation for property damage or injury to third parties (like neighbours, customers, or passersby) are covered, protecting the building owner from debilitating lawsuits.

3. Mitigating the Core Causes

The GNFS statistics point to Electrical Faults and Negligence as primary causes. Insurance provides a crucial, non-obvious benefit here:

• Risk Assessment: To issue a commercial fire policy, insurers conduct a risk survey. This process often identifies deficiencies in wiring, fire safety systems (extinguishers, smoke alarms), and safety protocols, forcing the business owner to correct them before cover is granted. This effectively turns the insurance application process into a proactive risk mitigation measure.

   

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• Incentives for Safety: Insurance premiums are often risk-rated. Businesses that invest in professional, high-quality electrical wiring, install fire suppression systems, and adhere to strict safety protocols may qualify for lower premiums or special discounts, providing a direct financial incentive to reduce the frequency of outbreaks.

Conclusion

The devastation at Ability Square is a palpable demonstration of the high-risk environment for commercial ventures in Ghana. While the immediate focus is on the GNFS response, the aftermath will undoubtedly shift to recovery.

 For those affected, their ability to bounce back will be entirely dependent on whether they viewed fire insurance not as a burdensome expense, but as an essential, legally mandated mechanism for continuity and survival in a market where the risk of catastrophic fire is a recurring menace. 

The surge in property losses indicates that the financial consequence of non-compliance is growing exponentially.