A major legal change is coming for property owners in Nigeria following the recent signing of the Nigerian Insurance Industry Reform Act (NIIRA) 2025 by President Bola Ahmed Tinubu.
The law introduces strict measures requiring landlords and owners of public buildings to insure their properties against hazards such as fire, flooding, and building collapse.
Failure to comply now carries severe consequences—a fine of at least ₦1 million, up to 12 months in jail, or both.
What is the NIIRA Act 2025?
The NIIRA 2025 replaces the two-decade-old Insurance Act of 2003, providing a new framework for the insurance industry. Its objectives include:
Consumer protection through stricter rules.
Fair play among insurance companies.
Higher insurance awareness and adoption.
Industry growth and job creation.
The law was signed into effect on August 5, 2025 and gives the National Insurance Commission (NAICOM) the authority to enforce its provisions.
Key Features of NIIRA 2025
- Stricter capital requirements for insurance operators to ensure financial strength.
- Mandatory insurance policies for specific sectors to safeguard consumers.
- Digitization of insurance processes for easier access and efficiency.
- Quick settlement of claims with zero tolerance for delays.
- Dedicated policyholder protection funds to assist in cases of insolvency.
- Participation in regional insurance programs, such as the ECOWAS Brown Card system.
Impact on Landlords and Public Building Owners
Under the new law, insurance is no longer optional for property owners. NIIRA makes it compulsory for all public buildings to be insured against risks like:
Fire
Flood
Building collapse
Earthquake
Storms
Other hazards specified by NAICOM
What Counts as a Public Building?
Public buildings include:
Tenement houses with more than one floor
Hostels
Rented apartments
Medical centers
Offices
Schools
Recreational facilities
Essentially, any building used for residential, educational, business, or leisure purposes—except private homes occupied by the owner without tenants—is considered a public building.
Other Compulsory Insurance Requirements
The Act also mandates:
Federal Government agencies to insure assets and employees.
Petroleum and gas stations, and vehicles transporting petroleum products, to carry third-party liability insurance.
Why This Law Matters
Beyond protecting property, these policies cover legal liabilities of landlords if tenants, visitors, or third parties suffer injury, death, or property loss on their premises.
What Landlords Must Do
Insure all public buildings.
Keep an up-to-date insurance certificate.
Renew coverage annually.
Provide proof of insurance to inspectors when requested.
How Does This Affect Tenants?
Landlords may transfer the cost of insurance to tenants, leading to:
Higher rent
Additional service charges
Penalties for Defaulters
Failure to comply attracts:
A minimum fine of ₦1 million, or
At least 12 months imprisonment, or
Both penalties combined.
How Much Will Insurance Cost?
Insurance premiums vary, but insurers must contribute 0.25% of net premiums quarterly to a Fire Services Maintenance Fund for firefighting support.
How to Make an Insurance Claim
If a building insured against fire is damaged:
- The insurer pays the claim unless fraud or deliberate arson is suspected.
- Funds must go toward repair or rebuilding unless the insured provides alternative security or the court approves a different arrangement.
- The insured can choose between restoration or receiving compensation, not exceeding the insured sum.
Who Oversees Implementation?
The National Insurance Commission (NAICOM) is responsible for enforcing the law and ensuring compliance nationwide.
What It Means for Nigeria
Stakeholders say the NIIRA Act will promote accountability, reduce disaster risks, and provide financial security for property owners and tenants. However, concerns remain about whether insurers will consistently honor claims when disasters occur.
Leave a Reply