The Nigerian Insurance Industry Reform Act (NIIRA) 2025 has introduced a modern framework for insurance regulation, placing strong emphasis on policyholder protection, ethical market practices, wider insurance penetration, and economic growth.
One key provision of the Act is the mandatory insurance of public buildings. Section 76(6) defines public buildings to include tenement houses with more than one floor, hostels, tenant-occupied buildings, and structures accessible to the public for education, healthcare, recreation, or business purposes.
These buildings must be insured annually against risks such as collapse, fire, flood, storms, and injury or death of occupiers. Non-compliance attracts stiff penalties—up to three years’ imprisonment, a ₦2 million fine, or both.
Why Valuation Matters
While compliance under NIIRA 2025 may appear as simple as purchasing a building insurance policy, experts insist that professional valuation by registered estate surveyors and valuers is essential to ensure adequate cover.
Accurate valuations help determine reinstatement costs, indemnity values, and risk exposure at different stages of a building’s life cycle. Arbitrary or outdated values could leave property owners underinsured and exposed to financial losses.
Building Life Cycle and Insurance Needs
- Construction Phase: During development, valuers assess project costs and risks—such as collapse, fire, or site accidents—covered under All Risk Insurance.
- Completion & Occupancy: After certification, a full reinstatement valuation is needed before the property is opened to the public. This establishes accurate insurance sums and informs owners of their market investment value.
- Public Use: Once in operation, periodic revaluations are vital to reflect market realities, depreciation, and alterations, ensuring annual renewals remain adequate.
Protecting Investments
Valuation also underpins Section 79(1–3) of NIIRA, which mandates that fire insurance payouts be applied to rebuilding. Without an up-to-date valuation, fair and sufficient compensation may be compromised.
Given inflation, forex fluctuations, and rising building material costs, professional valuation provides a fair and current basis for setting the sum assured. Whether under reinstatement or indemnity policies, this ensures policyholders receive proper cover when risks occur.
Bigger Picture
By embedding valuation into NIIRA’s compliance framework, stakeholders—insurers, regulators, and property owners—can build a more resilient, transparent, and trustworthy insurance system.
In short, valuation is not just a regulatory checkbox; it is the foundation for protecting investments, ensuring fair compensation, and strengthening confidence in Nigeria’s insurance market.
