₦1m Fine, Jail Awaits Landlords, Tenants Without Building Insurance

Landlords and occupiers of public buildings across Nigeria now face stiffer penalties for failing to insure their properties against risks and disasters. PulseNets learnt that under the newly signed Nigerian Insurance Industry Reform Act, offenders risk paying a fine of not less than ₦1 million, a jail term of up to 12 months, or both.

According to the Act, all public buildings must be compulsorily insured against hazards such as collapse, fire, earthquakes, storms, floods, and other risks as determined by the National Insurance Commission (NAICOM).

What qualifies as a public building?

PulseNets reported that Section 76 (6) of the law defines public buildings to include:

• Tenement houses with more than one floor,

• Hostels,

• Residential buildings occupied by tenants or lodgers, and

• Any structure accessible to the public for education, healthcare, recreation, or commercial activities.

Insurance must cover lives, property, and liabilities

The Act further mandates that such insurance coverage must extend beyond property to include lives and legal liabilities. This means landlords and occupiers are also responsible if users of the premises or third parties suffer injury, death, or damage linked to the building.

Speaking to PulseNets, industry stakeholders explained that this clause ensures accountability in cases where public safety is compromised.

New Fire Services Maintenance Fund introduced

PulseNets learnt that insurers issuing these compulsory policies are now required to remit 0.25% of net premiums every quarter into a Fire Services Maintenance Fund. This fund will be managed by NAICOM to strengthen firefighting operations through grants and the provision of modern equipment.

Defaulters risk fines of up to 10 times the required contribution, while persistent offenders could lose their operating licenses.

Sealing of risky buildings

The law empowers NAICOM to seal off any building classified as a public risk if it does not have valid insurance coverage. “This is not only about compliance but about safeguarding lives and assets,” a regulatory source told PulseNets.

Mandatory insurance extended to government assets and petroleum facilities

Beyond private landlords, PulseNets reported that Section 77 makes it compulsory for all assets and employees of the Federal Government and its agencies to be insured.

In addition, Section 78 stipulates that all petroleum and gas refilling stations, installations, and vehicles transporting petroleum products must carry compulsory insurance against third-party damages from fires or explosions.

Owners of such facilities are now required to display a Certificate of Insurance at their stations or attach it to transport documents. Non-compliance attracts a penalty of at least ₦1 million, a prison sentence of not less than two years, or both.

Also Read: Wike sends fresh warning to Abuja landlords

PulseNets learnt that the Nigerian government is pushing these reforms not just for regulatory compliance but also to reduce the economic burden of disasters, strengthen public safety, and deepen confidence in the insurance sector.

Industry experts told PulseNets that this Act, if fully enforced, could mark a turning point in how Nigerians perceive compulsory insurance for both public buildings and critical infrastructure.