Compulsory insurance in Nigeria is not only a legal requirement but also a crucial safety measure that shields individuals and businesses from unexpected risks. Understanding the significance of these mandatory insurance policies can help you or your business make informed decisions about your safety and financial stability.
In this article, we will explore the top six compulsory insurance policies in Nigeria, each serving a specific purpose and ensuring the safety of third parties.
1. Motor Third Party Insurance in Nigeria: A Roadway Necessity
In Nigeria, Motor Third Party Insurance is a crucial and compulsory insurance policy that all vehicle owners and drivers must have. This includes individuals and also companies. It is mandatory by law and covers liabilities that may arise during an accident involving the insured vehicle.
This policy applies to all vehicles, including motorcycles and commercial vehicles. It covers bodily injury, property damage, and death caused to a third party.
Recently, the cost of third-party motor insurance for private car owners, staff buses, tricycles, and special types of vehicles in Nigeria increased by 200 per cent. Previously, the premium for claiming 1 million Naira for private car owners was N5000, but now it costs a premium of N15,000 for a 3 million Naira claim.
Failure to obtain Motor Third Party Insurance can result in severe penalties, including a fine of N100,000 or six months imprisonment for a first conviction and N200,000 or one-year imprisonment for subsequent convictions.
2. Employee Group Life Insurance in Nigeria: Protecting Your Workforce
Employee Group Life Insurance is an essential aspect of employee welfare for both private and public sectors. As per Nigerian law, employers with five or more employees must obtain a life insurance policy for each worker. This policy offers financial support to employees or their beneficiaries in the event of disability or death while in service.
Failure to provide Employee Group Life Insurance for your employees can lead to penalties, including a fine of N250,000, one-year imprisonment, or both.
3. Health Care Professional Indemnity Insurance in Nigeria: Ensuring Patient Safety and Protection
Health Care Professional Indemnity Insurance is a legal requirement and compulsory insurance for all licensed healthcare providers in Nigeria. From government healthcare practitioners to private hospitals and maternity centres, this insurance policy compensates patients or their relatives in case of accidents or fatalities resulting from professional negligence.
Failure to have Health Care Professional Indemnity Insurance can result in severe consequences, including revoking the healthcare provider’s license.
4. Insurance of Public Buildings in Nigeria: Safeguarding Public Spaces
Public safety is paramount, and Insurance of Public Buildings in Nigeria serves as a protective measure. According to Nigerian law, all public buildings, including schools, hospitals, and commercial spaces, must be insured against liabilities arising from loss, bodily injury, or property damage caused by various perils like collapse, fire, earthquake, storm, or flood.
Failure to insure public buildings can lead to penalties, including a fine of N100,000, one-year imprisonment, or both.
5. Insurance of Buildings Under Construction in Nigeria: Mitigating Construction Risks
The Insurance of Buildings Under Construction policy is an essential requirement for anyone involved in the construction or ownership of multi-storey buildings in Nigeria. It provides a safety net against potential risks that may arise during the construction process.
This policy ensures that contractors, owners, and agents are held accountable for any negligence that may result in bodily harm, property damage, or fatality to the public. By complying with this policy, stakeholders can guarantee the safety of their projects and mitigate potential financial losses. Therefore, it is crucial to prioritise the Insurance of Buildings Under Construction policy to ensure the success of any construction project in Nigeria.
Failure to obtain Insurance for Buildings Under Construction in Nigeria can result in severe penalties, including a fine of N250,000, three years imprisonment, or both.
6. Aviation Third-Party Insurance in Nigeria: Confidence in Air Travel
Aviation Third Party Insurance in Nigeria is a non-negotiable requirement and compulsory insurance for aircraft operators. This policy covers liabilities caused by aircraft-related incidents, providing compensation for property damage or injury to third parties.
Failure to comply with Aviation Third Party Insurance in Nigeria can lead to legal consequences, including a fine or other penalties imposed by aviation authorities.
7. Marine Insurance in Nigeria: Navigating Maritime Risks
For individuals and organisations frequently engaged in marine transportation in Nigeria, Marine Insurance is a must-have policy. It protects against losses resulting from marine adventures, ensuring financial security during maritime operations.
Failure to obtain Marine Insurance in Nigeria can result in financial liabilities and potential legal actions from affected parties.
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Embracing compulsory insurance policies in Nigeria goes beyond meeting legal requirements; it secures your interests and contributes to a safer society.
By incorporating Motor Third Party Insurance, Employee Group Life Insurance, Health Care Professional Indemnity Insurance, Insurance of Public Buildings, Insurance of Buildings Under Construction, Aviation Third Party Insurance, and Marine Insurance into your risk management strategy in Nigeria, you proactively protect yourself, your employees, and the public.
These insurance safeguards are essential for securing your future and avoiding legal consequences due to non-compliance.
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