The National Insurance Commission and the Nigerian Insurers Association have pledged regulatory and industry support for the newly launched Lagos State Compulsory Building Insurance Scheme, describing it as a major step towards protecting lives, property, investments and livelihoods across Nigeria’s largest real-estate market.
The Commissioner for Insurance and Chief Executive Officer of NAICOM, Mr Olusegun Omosehin, made the commitment at the official launch of the scheme in Lagos.
Represented by the Deputy Commissioner for Insurance, Finance and Administration, Mr Ekerete Ola Gam-Ikon, Omosehin said the initiative could strengthen risk management, consumer protection and insurance penetration while providing financial relief to victims of fire, flooding and building collapse.
For Lagos, where rapid urbanisation, dense construction, recurring floods and structural failures have created substantial risks, compulsory building insurance represents an attempt to shift the burden of disasters away from victims, families and government emergency agencies towards a structured risk-transfer system.
“The Lagos State Building Insurance Scheme is designed to ensure that when disaster strikes, victims are not left to bear the burden alone,” Omosehin said.
Insurance as urban protection
The NAICOM chief said recent building-collapse incidents had demonstrated the urgent need for stronger compliance with compulsory insurance requirements.
Insurance, he noted, serves as an important social-protection mechanism by helping individuals, businesses and governments recover more quickly after disasters.
Without adequate cover, the destruction of a residential, commercial or public building can wipe out years of investment, displace occupants and place enormous financial pressure on affected families.
A functional insurance scheme can provide compensation, support reconstruction and reduce the demand for emergency government intervention.
However, the value of the programme will depend on whether the policies are genuine, risks are properly assessed and legitimate claims are settled promptly.
NAICOM makes three commitments
Omosehin outlined three major areas of regulatory support for the Lagos scheme.
First, NAICOM will ensure that every policy issued under the programme is underwritten only by insurance companies licensed and supervised by the commission.
Second, the regulator will support Lagos State in combating fake insurance certificates and unlicensed operators.
This is essential because compulsory schemes are particularly vulnerable to forged documents, fraudulent intermediaries and policies issued by companies without the legal authority or financial capacity to pay claims.
Third, NAICOM will insist on an open, transparent and competitive structure accessible to all qualified insurance operators.
A compulsory scheme should not become an exclusive commercial arrangement benefiting only a small group of insurers or brokers. Wider participation could encourage better pricing, service innovation and stronger claims capacity.
Technology to drive compliance
Omosehin commended the Lagos State Government for adopting digital platforms and geospatial intelligence to support implementation and enforcement.
Geospatial technology can help identify buildings, verify policy coverage and monitor construction activity more efficiently.
Digital certificates may also make it easier for government agencies, property owners and occupants to confirm whether a building has valid insurance.
Technology-driven enforcement could reduce document fraud and improve compliance, but the process must remain accessible.
Property owners should be able to register, verify policies and resolve complaints without facing unnecessary bureaucracy or unclear charges.
NIIRA 2025 strengthens legal foundation
The commissioner said the Lagos scheme aligned with the Nigerian Insurance Industry Reform Act 2025, which strengthened compulsory insurance provisions, enhanced consumer protection and encouraged digital insurance operations.
The law requires public buildings and buildings under construction above prescribed limits to maintain appropriate insurance cover for the protection of owners, occupants and third parties.
By moving from national legislation to state-level implementation, Lagos is attempting to transform compulsory building insurance from a largely ignored legal requirement into an enforceable protection system.
If successful, the model could be replicated by other states experiencing rapid urban growth, weak construction compliance and rising climate-related risks.
Claims settlement will define public trust
Omosehin urged participating insurance companies to settle genuine claims promptly, warning that the scheme’s credibility would depend on the experience of policyholders when losses occur.
Nigeria’s insurance industry continues to struggle with low public trust. Many consumers associate insurance with complicated documentation, delayed settlements and disputed claims.
Compulsory participation will therefore create even greater expectations.
Property owners who are required by law to pay premiums will demand clarity on the risks covered, policy exclusions, claims procedures and expected settlement timelines.
Insurers must combine professional underwriting with transparent communication and efficient claims handling.
NIA: Insurance is protection, not punishment
The Chairman of the Nigerian Insurers Association, Mrs Ebelechukwu Nwachukwu, also endorsed the programme, describing it as an important measure for protecting lives, assets and investments.
“Insurance is not an afterthought following disaster; it is an essential part of building safer communities before disaster occurs,” she said.
Nwachukwu argued that insurance should not be perceived as another financial burden imposed on property owners, but as an investment in resilience and continuity.
While insurance cannot prevent fire, flooding or structural failure, it can ensure that such events do not become permanent financial catastrophes.
She urged participating insurers to uphold professionalism, apply fair underwriting standards and settle legitimate claims promptly.
The association, she added, was prepared to collaborate with regulators, state governments and other stakeholders to improve compliance with compulsory insurance across Nigeria.
Market implications
The Lagos scheme could significantly expand opportunities for insurers, brokers, loss adjusters, building surveyors, estate managers, risk consultants and insurance-technology providers.
It may also improve the quality of property data available to regulators, mortgage lenders and investors.
For banks and other property financiers, insured buildings provide additional protection around loans and mortgage exposures.
The programme could also encourage developers and landlords to pay greater attention to building standards, maintenance and risk reduction because insurers are likely to demand inspections and compliance before issuing cover.
Insurance, however, cannot replace proper construction, planning approvals, engineering supervision or the enforcement of building codes.
Investor relevance
For real-estate investors, the scheme could reduce exposure to catastrophic loss and support more disciplined property management.
International investors often expect major assets to carry credible insurance coverage. Stronger compliance could therefore improve Lagos’ attractiveness as a real-estate and infrastructure investment destination.
Yet investors will closely examine whether premiums are competitively priced, claims are enforceable and the programme is administered transparently.
A compulsory scheme burdened by hidden fees, restricted participation or weak claims performance would undermine confidence rather than strengthen it.
Brand implications
For Lagos State, the scheme supports its positioning as a modern megacity seeking to improve public safety and institutionalise risk management.
For NAICOM and the insurance industry, it presents an opportunity to rebuild trust through transparency, professionalism and visible claims settlement.
For developers, landlords and facility managers, valid insurance coverage could become an important reputational signal, demonstrating responsible management and concern for occupants.
BRANDECONOMY Insight
The Lagos State Compulsory Building Insurance Scheme could become one of Nigeria’s most important urban-risk reforms—but only if implementation is credible.
The state must prevent fake certificates. NAICOM must ensure that only licensed insurers participate. Insurance companies must underwrite responsibly and settle genuine claims without delay.
Compulsory insurance must not become compulsory frustration.
The scheme’s success will not be measured by the number of certificates issued or premiums collected. It will be measured by how effectively it protects victims, restores damaged property and helps families and businesses recover from disaster.
If Lagos gets the structure right, it could provide a national template for transforming building insurance from a poorly enforced legal obligation into essential urban-resilience infrastructure.
