The insurances a Nigerian business is expected to hold

Nigerian law names eleven compulsory classes of insurance, and the list grew in 2025. Most business owners find out which ones apply at the worst possible moment, usually during an inspection or after a loss. Enforcement has been getting tighter rather than looser.

What changed in 2025

The Nigeria Insurance Industry Reform Act, usually shortened to NIIRA, was signed in 2025 and repealed the Insurance Act 2003 outright. It also took in the Marine Insurance Act, the Motor Vehicles Third Party Insurance Act, the National Insurance Corporation of Nigeria Act and the Nigeria Reinsurance Corporation Act, so five statutes became one. Most guides still describe the six compulsory classes from the old Act, and that list is now out of date.

The compulsory classes, and where they sit in the Act

• Group life for employers, section 68, once the business has five or more employees
• Builders liability on buildings under construction of more than one floor, section 75
• Occupiers liability on buildings the public can enter, section 76
• Insurance of government assets and employees, section 77
• Petroleum and gas stations, for fire, explosion and third party liability, section 78
• Healthcare professional indemnity, section 80
• Aviation ancillary services, section 81
• Marine cargo on imported goods, section 82
• Third party motor, section 84
• Credit life on facilities of 10 million naira and above, section 91
• Container insurance, covering loss and damage in transit and handling, section 203

Not all eleven will apply to you. A small trading company with a van and six staff is looking at group life and third party motor. Add a warehouse the public can walk into and section 76 arrives. Import anything and section 82 does too.

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.

The Act also sets what a third party policy has to pay at minimum. Section 87 puts third party property damage at 3 million naira, with 100,000 naira for out-patient medical expenses and 250,000 naira for in-patient treatment. The Commission can raise those figures. The property damage floor in particular is a long way above where it sat under the old Act, which is worth knowing if you last reviewed your motor schedule years ago.

Group life for employers

Section 68 requires group life cover once a business has five or more employees. It pays a death benefit to the employee's beneficiaries if they die while employed, and the Act itself sets the floor at three times that employee's annual total emolument. Going without it carries a penalty of 250,000 naira per employee, so a twenty person firm is exposed to 5 million naira before anyone has actually died. Your pension administrator will usually ask for evidence of the cover.

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

Section 75 requires builders liability on any building under construction of more than one floor, covering site accidents, collapse, and injury or damage to third parties. Section 76 covers the finished article, occupiers liability on premises the public can enter, which takes in offices, malls, schools, hospitals, hotels and tenement buildings. Occupiers are the ones who tend to be caught out, because the building is finished and the obligation feels like it ended with the scaffolding.

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.