Compulsory Insurance In Nigeria

1. Understanding
Compulsory
Insurance
Según Collins

2. What is Insurance
• Insurance can be said to being a practice
whereby people of same risk contribute to
a common purse whereby the contributors
receive a form of compensation at the
event of a loss.

3. How does Insurance works
• Insurance is based on a principle of large
numbers. This simply means that it is
possible to build a large pool of funds from
small individual contributions. Again it is
pertinent to note that all contributors
cannot suffer a loss at same time. The few
unfortunate ones are therefore easily
compensated at the time of loss.

4. What are the benefits of
Insurance
• Knowing your risk is been carried by
someone else gives you peace of mind.
You can sleep with both eyes. Insurance
also gives businessmen confidence to do
business as they are sure of recovery in
the event of an unexpected loss.
Insurance is thus a business that exists for
other business to exist.

5. What is compulsory Insurance
• It is important to note that not all classes
of Insurance are compulsory. Therefore
compulsory Insurance are those classes
of Insurance made compulsory by law,
frequently with the aim of providing
protection to third parties and the general
public.
• There are 7 classes of compulsory
Insurance:

6. Classes of compulsory
Insurance
• Motor Vehicle
• Building under construction
• Public buildings
• Fidelity Guarantee
• Employer’s Liability
• Medical Professional Liability
• Group Life for all employers

7. Motor Vehicle (Third Part)
Insurance
• The law requires that every motor vehicle that is put to
road use must be insured against any third party
property damage that may be occur from use of such
vehicle.
• The penalty for non compliance is a fine of up to
N250,000.00 or one year imprisonment.

8. Insurance of Building Under
Construction
• The Insurance Act of 2003 makes Insurance of building under
construction compulsory for the owner & contractors involve.
• The penalty for non compliance is a fine of up to N250,000.00 or
three years imprisonment.

9. Insurance of Public Buildings
• It is mandatory for every public service building to be insured according to
the Insurance Act of 2003.
• The public building insurance provides cover for compensation in the event
of bodily injuries, death, and property damage to tenant and its penalty for
none compliance attracts a N100,000.00 fine or a one year imprisonment.

10. Fidelity Guarantee

11. Medical & Health Care Professional
Indemnity Insurance
• Doctors who are licensed to provide medical services to the general
public are mandated by law to have a Professional Indemnity Insurance
cover in place.
• This policy covers any legal liability that may arise during the course of
performing his/her medical obligations to Third parties which might
result in death, permanent disabilities or injury.
• Non compliance may attract revocation of Medical License by National
Health Insurance Council.

12. Group Life
• It has become statutory for employers to
have at least five or more employees
insured under the Group Life Insurance
Policy.
• This policy provides compensation in the
event of death of a staff under its cover