Photo: Yellowcrunchy, Wikimedia Commons, CC BY-SA 4.0Business insurance in Nigeria
The covers the law requires
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The employer checklist
| Obligation | Rule | Read |
|---|---|---|
| Employees' Compensation Scheme | 1% of total monthly payroll to NSITF; certificate of compliance | NSITF |
| Group life | At least 3× annual total emolument per employee, premium before cover starts | Group life |
| Company vehicles | Third-party at NAICOM's rates (₦20,000 to ₦100,000 for commercial classes) | Motor insurance |
| Health insurance | Employers and employees with five staff and above (NHIA Act, s.14) | NHIA registration |
Figures: employer calculator.
Builders' and occupiers' liability
Besides motor policies, the NIID verification platform checks builders' liability, occupiers' liability, marine and marine hull policies (askNIID). NAICOM describes the Reform Act 2025 as a new push to enforce compulsory insurance and to insure government assets (NAICOM). Ask a licensed insurer or broker which compulsory covers apply to your premises and projects.
Buying cover for the business
Non-life and composite insurers sell property, fire, burglary, goods-in-transit, liability and engineering covers; the Q2 2026 market split shows oil and gas (27.7%), fire (20.0%) and motor (19.1%) as the largest non-life classes (NAICOM bulletin). Brokers must be licensed by NAICOM: check an insurer or broker.
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Frequently asked questions
What insurance is compulsory for businesses in Nigeria?
The Employees' Compensation Scheme contribution to NSITF (1% of payroll), group life for employees (3× annual pay), third-party cover for every vehicle, and health insurance for employers with five staff and above. Ask a licensed insurer about liability covers for buildings and premises.
How much is NSITF contribution?
At least 1% of total monthly payroll, paid every month by the employer (Employee's Compensation Act 2010, s.33(1)).
Sources
- NSITF — Services: employer registration, contributions (1% of total monthly payroll), claims, certificate of compliance
- National Industrial Court of Nigeria — Employer is obligated to pay minimum 1% contribution of total monthly payroll into Employees' Compensation Fund (NSITF v NECO Staff School, 7 May 2025)
- NAICOM and PenCom — Revised Guidelines on Group Life Insurance Policy for Employees (1 September 2020; Pension Reform Act 2014, s.4(5))
- NAICOM — Circular NAICOM/DPR/CIR/46/2022: new premium rates for motor insurance, effective 1 January 2023 (22 December 2022)
- National Health Insurance Authority Act 2022 (Act No. 17, Official Gazette No. 95, Vol. 109, 24 May 2022) — NHIA gazetted copy
- Nigerian Insurance Industry Database (NIID) — askNIID verification platform: Nigerian Insurers Association
- NAICOM — The dawn of a new era as President Bola Ahmed Tinubu signs the Nigerian Insurance Industry Reform Act 2025 into law (14 August 2025)
- NAICOM — Bulletin of the insurance market performance, second quarter 2026 (tables 1 and 5)