Nigeria’s new Insurance Industry Reform Act, 2024, is changing the way real estate players operate permanently. 

No longer just the concern of insurers, the law forces insurance to the forefront of property development, ownership, and investment decisions. 

For landlords, developers, facility managers, and even the government, the Act makes one thing clear: if you’re building, owning, managing, or investing in property in Nigeria, insurance is now your business too.

Here are the major provisions and why they matter:

No more building without builders’ liability insurance

Before laying a single block, every developer must now secure a builders’ liability policy. This insurance must cover deaths, injuries, or property damage that may arise from construction activities, including collapses. 

Building approval authorities are also legally bound to confirm the existence of this insurance before issuing permits.

This is mainly because It makes insurance a built-in cost in every development budget. Gone are the days when construction could begin without formal risk protection.

And, if you’re a developer, project manager, architect, or even an engineer, you now need insurance to get the green light.

All public buildings must now be insured

If your property is accessible to the public, such as shopping malls, office complexes, tenements, hostels, the law says you must insure it against disasters such as fire, floods, earthquakes, and building collapse.

Mainly because it pulls thousands of high-traffic buildings into the insurance space, which improves public safety and ensures compensation for disaster victims.

Landlords and facility managers of public-use buildings are usually affected. If your property serves the public, it must now be insured, no exceptions.

Failure to Comply? Prepare for Seal-Offs, Fines, or Jail Time

NAICOM (Nigeria’s insurance regulator) now has the authority to shut down public buildings that flout these insurance rules. Those in violation risk fines starting from N2 million or at least three years in prison.

It gives enforcement actual bite. Compliance is no longer optional; it’s a legal obligation.

Landlords, developers, and even insurance firm should take note because not insuring your property could cost you more than money, it could cost you your freedom.

Fire insurance payouts must fund rebuilding

If a building is destroyed by fire, insurers are now required to direct payouts toward rebuilding or restoring the structure, not just handing over a lump sum to owners.

This matters because it prevents misuse of claims money and protects the long-term value of properties, lenders’ interests, and tenants’ rights.

Insurance is no longer just a fallback, it’s a tool for recovery and sustainability.

Government must lead by example

For the first time, all government-owned buildings and assets must be insured. Ministries, departments, and agencies are legally bound to comply.

It’s because It increases institutional demand for insurance while sending a strong message, public infrastructure deserves the same risk protection as private assets.

Insurers should expect to compete fiercely for government contracts, and bureaucrats will be under pressure to comply or face consequences.

Insurers can now fund real estate projects

One of the boldest moves in the Act allows insurance companies to directly invest in real estate development. That means more capital could flow into housing, commercial spaces, and infrastructure.

Developers and real estate investment trusts (REITs) could now have access to a new source of long-term funding.

With this, investors, real estate developers, REIT managers, and insurers looking for asset-backed returns can .benefits. Insurance firms are no longer just risk managers, they’re now potential property financiers.

The Insurance Act now trumps conflicting housing laws

If there’s a conflict between this Act and existing housing fund laws, this Act wins. That provides legal clarity and eliminates grey areas around insurance obligations in housing projects.

This matters because developers and investors can now make decisions without the fear of contradicting outdated or confusing laws. Now, legal ambiguity is a thing of the past. The new Act is the final word.

High-risk facilities must also be covered

Petrol stations, gas plants, and other energy installations must now be insured, especially because many of these are located on rented or shared land.

These facilities pose serious risks, and the law ensures landlords, neighbours, and the public are protected from the fallout of industrial accidents. Property owners leasing land to energy or industrial businesses should focus on this.

If there’s fuel or gas on your land, insurance is now compulsory.

What you should know – Insurance Is Now the Backbone of Nigeria’s Property Market

The Nigeria Insurance Industry Reform Act, 2024, signals a major shift. It weaves insurance into every aspect of real estate construction, ownership, management, and financing. 

It forces stakeholders to treat insurance not as a backup plan, but as a prerequisite.

For those who adapt early, this Act offers opportunities, not just regulation. 

A more stable and protected real estate sector could boost investor confidence, unlock new capital from insurers, and ultimately create a safer, more sustainable property market.

Ignore it, and you risk fines, shutdowns, or worse. Embrace it, and you could be part of a new era in Nigerian real estate.