Nigeria has a new law, the Nigerian Insurance Industry Reform Act 2025 (NIIRA), which makes insurance on public buildings compulsory.
This is not entirely a new concept, as the previous Insurance Act 2003 also had provisions for this, but the new law raises the penalties for non-compliance significantly. Landlords and occupiers who fail to insure their properties can now face a fine of at least ₦1 million, up from ₦100,000, and/or up to 12 months in prison.
The mandatory insurance policies cover hazards such as: fire, flood, collapse, and other risks, and they are also meant to protect the legal liabilities of building owners and occupiers in cases of injury, death, or property damage to occupants and third parties.
Observers point out that the concern that this new law will lead to higher rents is a valid one, as some property owners may pass the cost of the insurance premium on to their tenants.
However, the law is aimed at protecting the public and providing a safety net in the event of unforeseen disasters, a response to frequent building collapses and other tragedies in the country.
The Government and the National Insurance Commission (NAICOM) believe this move will not only boost the insurance industry but also ensure the safety of citizens and protect investments.
