Introduction

Running a business in Nigeria comes with unique opportunities and challenges. From unpredictable market fluctuations and infrastructural issues to theft, fire, and legal liabilities, entrepreneurs face risks daily. One of the smartest moves any business owner can make is to insure their business against these uncertainties.

Yet, many Nigerian businesses—especially small and medium-sized enterprises (SMEs)—operate without any form of insurance. This leaves them vulnerable to losses that could otherwise be managed or avoided.

In this practical guide, we’ll break down:

• The types of insurance your business might need

• How to get insured in Nigeria

• How much it costs

• What to look out for

• And how to file a claim if something goes wrong

Whether you’re running a one-man shop, a tech startup, or a growing enterprise, this post will help you understand exactly how to protect your business and secure its future.

Why Your Nigerian Business Needs Insurance

Running a business is a financial investment—and like any investment, it carries risks. Having insurance means you won’t have to start from scratch if disaster strikes.

 Consider these real-life situations:

• A fire destroys a boutique filled with stock worth ₦3 million.

• A client sues a construction firm for alleged negligence.

• Armed robbers cart away ₦800,000 from a restaurant’s cash register.

• A logistics business’s van is involved in an accident.

In all these cases, insurance helps absorb the financial shock, allowing the business to recover faster.

 Benefits of Business Insurance:

• Protects assets and inventory

• Covers liability and legal costs

• Safeguards employees and customers

• Ensures business continuity

• Increases credibility with partners and investors

Types of Business Insurance in Nigeria

Not all businesses need the same type of insurance. The kind of coverage you need depends on your industry, size, staff strength, and risk level. Below are the most relevant business insurance types in Nigeria.

1. Fire and Special Perils Insurance

Protects your office, shop, or warehouse against fire, lightning, flood, storm, and explosions.

Ideal for: Retailers, warehouses, restaurants, supermarkets, manufacturers.

2. Burglary/Theft Insurance

Covers loss or damage to your business property due to break-ins or armed robbery.

Ideal for: Businesses that keep valuable stock or cash on-site.

3. Public Liability Insurance

Protects your business if a customer or third party suffers injury or property damage while on your premises.

Ideal for: Salons, restaurants, hotels, clinics, and event centers.

4. Professional Indemnity Insurance

Protects service providers (like doctors, lawyers, engineers, consultants) against legal claims due to errors or negligence.

Ideal for: Professionals and consulting firms.

5. Goods-in-Transit Insurance

Covers goods while they are being transported from one location to another.

Ideal for: Logistics companies, eCommerce businesses, importers/exporters.

6. Group Life and Health Insurance

Covers employees in case of illness, injury, or death. Group life insurance is even legally required under the Pension Reform Act for companies with 3 or more staff.

Ideal for: Companies with full-time staff.

7. Business Interruption Insurance

Covers loss of income if your business operations are temporarily halted due to unforeseen events like fire, flood, or riots.

Ideal for: Medium to large businesses with ongoing overhead expenses.

8. Vehicle (Motor Fleet) Insurance

Covers vehicles owned by your business in case of accidents, theft, or damage.

Ideal for: Delivery services, sales companies, courier/logistics businesses.

How to Insure Your Business in Nigeria (Step-by-Step)

 Step 1: Assess Your Risks

Think critically about:

• What could go wrong?

• What assets are most valuable?

• Are customers or staff exposed to risk?

List these out to determine which type(s) of insurance you truly need.

 Step 2: Choose the Right Insurance Policy

Don’t just buy insurance because a broker recommended it. Ask questions and compare policy features.

Key areas to check:

• Coverage details

• Exclusions (what is not covered)

• Premium cost and payment options

• Claim process and timelines

If you’re not sure, consult a licensed insurance broker for guidance.

 Step 3: Select a Licensed Insurance Provider

Only buy from companies licensed by NAICOM (National Insurance Commission).

Top Insurance Companies in Nigeria include:

• Leadway Assurance

• AIICO Insurance

• AXA Mansard

• Custodian & Allied

• Mutual Benefits Assurance

Visit www.naicom.gov.ng to verify an insurer’s license status.

 Step 4: Submit Required Documents

Documents often include:

• Business registration (CAC certificate)

• Proof of business address

• List and valuation of insured items

• Staff list (for group insurance)

• Bank account details

 Step 5: Pay Your Premium

Premiums are usually paid monthly, quarterly, or annually. For microbusinesses, some policies allow as low as ₦1,000 per month.

 Step 6: Receive Your Policy Certificate

Ensure your insurer issues a policy document or certificate showing the coverage, amount, and period.

Keep this document safe—it will be required if you need to make a claim.

How to File a Claim in Case of Loss

When disaster strikes, here’s what to do:

 Step-by-Step Claim Process:

1. Notify your insurer immediately (within 24–72 hours)

2. Provide necessary documentation (receipts, police report, photos, etc.)

3. Complete the claim form

4. Let the insurer inspect the damage (if needed)

5. Follow up regularly

6. Receive payment or compensation as approved

Tip: Keep records and receipts of assets you’re insuring. It makes claim processing easier and faster.

What Business Owners Should Watch Out For

Insurance is powerful, but only when it’s used right. Watch out for these mistakes:

 Don’t:

• Buy from unauthorized agents

• Ignore policy exclusions

• Delay premium payments

• Fail to update policy when your business grows

 Do:

• Review your policy yearly

• Ask for clarification on confusing terms

• Insure based on the current market value of your property or stock

• Inform your insurer if you move business location

How Much Does Business Insurance Cost in Nigeria?

Premiums vary depending on:

• Type of insurance

• Value of property/assets

• Risk level of your business

• Coverage duration

 Sample Estimates:

These are estimates. Contact insurers for accurate quotes tailored to your business.

Can Small Businesses Afford Insurance?

Yes! Microinsurance is growing in Nigeria. With partnerships between insurers and mobile money agents, small businesses can now:

• Buy insurance with as little as ₦500/month

• Use USSD codes to manage policies

• Receive claims via bank or wallet transfers

Some popular microinsurance providers include:

• Cassava Microinsurance

• AXA Mansard Microinsurance

• GOXI Microinsurance

Conclusion

Insurance is no longer a luxury or “big man” affair. It’s a must-have tool for survival in today’s unpredictable business environment. Whether you run a barbing salon, a logistics startup, a fashion line, or a food business, having the right insurance gives you confidence to grow.

Start by identifying your risks, choosing the right coverage, and working with a trusted insurance provider. In the end, it’s not about expecting bad things to happen—it’s about being prepared just in case they do.

Final Tips

•  Talk to a licensed insurance agent

•  Verify all insurers on naicom.gov.ng

•  Always collect and keep your policy documents

•  Consider digital or mobile microinsurance options