From mandatory builders’ liability to insurers funding real estate projects, the new law hardwires insurance into property development, ownership, and management.
The Nigeria Insurance Industry Reform Act, 2024 is more than an update for insurers, it’s a game-changer for the real estate sector.
The law embeds insurance into every stage of the property lifecycle: planning, construction, occupancy, and even investment funding.
From compulsory builders’ liability to allowing insurers to invest in real estate projects, these provisions will influence how landlords, developers, facility managers, REITs, and government agencies operate.
Nairametrics presents 8 key sections of the Act with plain-English explanations and why they matter.
Compulsory insurance for buildings under construction
Sections: 75(1)– (3), (7)
What it means: Before construction starts, owners/contractors must take a builders’ liability policy to cover death, injury, and property damage to third parties from building activities, including collapse. Building control authorities must verify this before granting approval.
Why it matters: Makes insurance a non-negotiable cost in development budgets and prevents uninsured tragedies from crippling projects.
Who must comply: Developers / Contractors, architects, engineers, builders, project managers, and related consultants.
Key Point: “No insurance, no building permit, this could be the new normal for developers.”
Compulsory insurance for public buildings
Sections: 76(1)–(4)
What it means: Owners or occupiers of public buildings, offices, malls, tenements, hostels, shops must insure them against collapse, fire, earthquake, storm, and flood.
Why it matters: Brings millions of commercial and multi-tenant buildings into the insurance net, improving safety standards and compensation for victims of building disasters.
Who must comply: Landlords & Facility Managers of Public Buildings
Key Point: If your property is open to the public, the law says it must be insured.
Enforcement with seal-up powers and criminal penalties
Sections: 76(5)–(7)
What it means: NAICOM can work with authorities to seal non-compliant public buildings. Offenders face at least three years in prison or fines from N2 million.
Why it matters: Real teeth for enforcement property operators can no longer ignore insurance laws without serious consequences.
Who it affects: Landlords, Developers, Contractors, Insurance companies
Key Takeaway: Non-compliance could now cost you millions or your freedom.
Use of insurance payouts to rebuild after fire
Sections: 79(1)– (3)
What it means: Fire insurance proceeds should go toward reconstructing or reinstating damaged buildings, with insurers able to structure claims to ensure rebuilding happens.
Why it matters: Protects property values, lender interests, and business continuity, instead of payouts being diverted elsewhere.
Who it affects: Landlords, Developers, Contractors, Insurance companies
Key Takeaway: Insurance money for fire damage must go back into rebuilding not the owner’s pocket.
Government must insure its own assets
Sections: 77(1)– (3)
What it means: All government buildings, facilities, and assets must be insured.
Why it matters: Creates steady institutional demand for property and liability insurance while protecting public infrastructure.
Who it affects: Government Ministries, Departments & Agencies
Key Takeaway: The government will now practise what it preaches by insuring its own buildings. Expect a scramble for government business.
Insurers can invest in real estate development
Sections: 27(2)(g), §27(5)
What it means: NAICOM can allow insurers to invest in real estate development projects. Where other laws conflict, the Insurance Act prevails.
Why it matters: Opens a new pool of institutional capital for developers, REITs, and infrastructure projects.
Who it affects: Property Investors & REIT Managers
Key Takeaway: Insurers can now put their money where the bricks are. This could also create opportunities for real estate acquisitions by Insurance firms. Recall Custodian Investment acquired UPDC some years back.
Act prevails over housing fund laws in conflicts
Sections: 230(1)– (2)
What it means: If the Bill conflicts with the National Housing Fund Act or similar laws on insurance matters, this Bill takes precedence.
Why it matters: Removes legal ambiguity for developers, lenders, and investors on insurance obligations tied to housing projects.
Key Takeaway: When in doubt, this Act calls the shots on housing-related insurance. Lawyers can’t come and cause confusion here.
Compulsory insurance for petroleum and gas facilities
Sections: 78(1)– (2)
What it means: Petrol stations, gas plants, and related facilities must be insured many of which are on leased or co-located real estate.
Why it matters: Mitigates high-risk exposure for landlords and neighbouring property owners.
Who it affects: Owners of High-Risk Industrial or Energy Facilities
Key Highlights: If you have high-risk facilities on your land? The law says they must be insured. Think independent power providers.
Bottom Line
The Nigeria Insurance Industry Reform Act, 2024, is set to weave insurance into the DNA of Nigeria’s property market.
- It compels developers, landlords, facility managers, and even government agencies to factor insurance into every stage of the asset lifecycle.
- Compliance will no longer be an afterthought; it will be a prerequisite for approvals, occupancy, and even financing.
- For investors and operators who move early, this isn’t just about ticking regulatory boxes.
- The Act creates a more predictable risk environment, strengthens asset protection, and opens the door to new funding streams as insurers deploy capital into real estate projects.
- It could deepen penetration, boost liquidity in the sector, and lift investor confidence.
The challenge is compliance and cost; the catalyst is safer assets, stronger balance sheets, and access to fresh capital.
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