http://en.wikipedia.org/wiki/Eldfell
5,300 had to be evacuated from the island of Heimaey due to an eruption in 1973.
In 1783 the Laki volcano killed about a quarter of the Icelandic population, due to both poisoning and an ensuing famine. That volcano also appeared to have global climate effects:
The earthquakes are probably a bigger problem, since they affect a larger area don't all occur in specific locations. Design the building properly and even that shouldn't be a big problem.