The insurances a Nigerian business is expected to hold
Several classes of insurance are required by law in Nigeria rather than optional. Here is what commonly applies to an employer, and what happens when it is missing.
Most business owners find out which insurances are compulsory at the worst possible moment, which is usually during an inspection or after a loss. The classes below come up most often, and the enforcement of them has been getting tighter rather than looser.
Third party motor
Any vehicle on a Nigerian road is required to carry at least third party cover. It pays for injury and damage you cause to other people, not for your own vehicle. It is also the class where fake certificates are most common, which is why the industry moved to a central database that police can check against.
If you run a fleet, the risk is not really the fine. It is discovering after a serious accident that one of your certificates was never backed by a real policy.
Group life for employers
Employers above a certain headcount are required to maintain group life cover for staff under Nigerian pension legislation, generally set at a multiple of annual salary and payable to the employee's beneficiaries. Your pension administrator will usually ask for evidence of it.
Employers liability and workplace injury
Cover for injury to employees in the course of their work sits alongside the statutory compensation scheme. The practical value is that a serious workplace injury becomes a claim rather than a cash flow event you were not expecting.
Buildings under construction and public buildings
Nigerian law requires insurance on buildings under construction, and on public buildings, covering liability for injury or property damage to third parties. Occupiers of premises the public can enter are the ones who tend to be caught out here.
What actually goes wrong
- The policy exists but the sums insured were set years ago and never revisited, so a claim is settled proportionally and pays far less than expected
- Cover lapsed at renewal because nobody owned the diary
- The certificate was issued but the premium never reached the insurer
- The business grew, took on staff or premises, and the schedule was never updated
This is a general summary and not legal advice. Requirements and thresholds change, so confirm what applies to your business before relying on any of it.
