Nigeria’s New Law: Landlords Face ₦1 Million Fine or Jail for Uninsured Buildings (2025 Guide)

A new law signed in August 2025 makes property insurance compulsory for “public buildings” in Nigeria. Discover if your building is affected, what the law requires, and how to avoid the severe penalties of a ₦1 million fine or a 12-month jail term.

If you own a building in Nigeria—whether you live abroad or locally—a new federal law has just been enacted that you cannot afford to ignore. The government has made it mandatory to insure certain types of properties, and the consequences for failing to comply are severe.

This isn’t just a suggestion; it’s the law. The newly signed Nigeria Insurance Industry Reform Act of 2025 is a landmark piece of legislation aimed at strengthening the nation’s financial sector. However, for landlords and property owners, it means immediate action is required to avoid facing a ₦1 million fine, 12 months in jail, or both.

Let’s break down exactly what this law means, who it affects, and what you need to do right now.

What is the New Compulsory Insurance Law?

Signed into law by President Bola Ahmed Tinubu in August 2025, this act was drafted by the National Insurance Commission (NAICOM) to enforce a culture of insurance and generate significant revenue as part of the nation’s push towards a trillion-dollar economy.

The law mandates that all “public buildings” must be insured against a range of risks, including:

• Fire

• Flood

• Storm

• Building Collapse

• Earthquake

Crucially, the insurance must cover liability for injury, death, or property damage suffered by users, tenants, visitors, or any third party on the premises. In simple terms, if something happens to your building and a person gets hurt, the insurance company—not you—is responsible for the compensation.

Does This Law Apply to Your Property? Defining “Public Building”

This is the most critical question for every landlord. The term “public building” is defined very broadly under the new act and covers far more than just government offices. According to Section 76(6) of the act, a public building includes:

• A tenement house of more than one floor (e.g., any one-story, two-story “upstairs” building).

• A building occupied by a tenant, lodger, or licensee. This broad definition could potentially include bungalows rented out to tenants.

• Any building to which members of the public have access for the purpose of education, medical services, recreation, or business transactions.

This means the law applies to almost every building that isn’t exclusively occupied by the owner themselves.

Real-World Examples: Is Your Building Covered?

To make it perfectly clear, here are some examples of properties that must be insured under this new law:

• Residential Buildings: Mr. Abu owns a two-story building in Port Harcourt with ten tenants. He must insure the building against collapse, fire, and flood to cover his tenants and their visitors.

• Schools & Hostels: A university in Ibadan with a hostel for 500 students. This is a public building, and the insurance must cover potential injury, death, and fire risk for all students.

• Places of Worship: A church in Onitsha or a mosque in Kano, open to the public for worship. It must be insured against fire, collapse, and storms, covering all members and visitors.

• Hospitals & Clinics: A private hospital in Abuja that receives patients daily. The insurance must cover doctors, patients, visitors, and even expensive medical equipment.

• Commercial Properties: A shopping mall in Lagos, a block of shops in Aba, or any building used for business. The owner must insure the property and its users against fire and accidents.

• Petrol Stations: All petrol stations are considered high-risk and must have comprehensive insurance against fire and explosion. They are required to display their insurance certificate.

• Government Offices: All government buildings, including police stations and ministry offices, must be insured to protect staff, visitors, and government property.

Your Responsibilities as a Landlord

Under this new law, your duties are clear and non-negotiable. You must:

1. Insure All Your Public Buildings: Contact a licensed insurance company to get the appropriate coverage.

2. Keep the Certificate of Insurance: You must have the certificate readily available as proof of compliance.

3. Renew the Policy Every Year: The insurance must be current. An expired policy is the same as having no policy.

4. Show Proof to Inspectors: Authorized inspectors will be conducting checks, and you must present your certificate upon request.

The Financial Impact on Landlords and Tenants

While this law introduces a new expense, it provides critical protection. However, it is widely expected that landlords will pass this new cost on to their tenants. This means we can anticipate a slight increase in rental and service charges across the country as landlords factor the annual insurance premium into their fees.

The Key Takeaway: Compliance is Not Optional

This is a major shift in Nigeria’s approach to property management and public safety. The government is determined to enforce this law, and ignorance will not be an acceptable excuse.

• Insurance is now compulsory for a vast majority of landlords.

• The penalties are severe: A ₦1 million fine, jail time, and the potential sealing of your property.

• Tenants will likely share the cost through increased rent.

The era of leaving property risks to chance is over. To protect your investment and your freedom, taking action to insure your property is no longer a choice—it’s a legal requirement.

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