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How to Choose Liability Insurance in Nigeria

by | Guides

May 9, 2022

If you cause an accident in Nigeria, the accident victim may decide to sue you. And if he or she wins in court, you will have to pay reparations which may be very costly. That is where liability insurance comes in.

Liability Insurance, simply put, is any insurance that shields you against the events that may follow damage(s) caused by you. Particularly damage to properties that aren’t yours.

Do you need Liability Insurance in Nigeria?

Liability insurance, also called third-party insurance, pays for damages you made to third parties. Your insurance company takes this responsibility. 

There are a few main types of liability insurance. And they include:

  • Employers’ liability: as the name suggests, this insurance is meant for employers. Lagos state government, for example, demanded that everyone who owns a company and has people working under them be covered by the employer’s liability insurance. This insurance is going to compensate for any injuries, whether physical or emotional, your employees incur as they work for you. 
  • Public liability: If you own a company, you are always going to influence the public in some way or the other. This is why you need public liability. This insurance will pay for any ‘injuries’ the public sustain as a result of your business activities.  
  • Product liability: This insurance pays for damages caused to any member of the public which resulted from using your products.
  • Professional indemnity: This is similar to the product liability. But instead of paying for damages caused by product use, it pays for damages caused by your services. Services can be anything —legal services, customer care services, etc. 

Read: How Does Electricity Work in Nigeria? 

Personal Liability Insurance

Personal Liability Insurance, also referred to as Comprehensive Personal Liability, is insurance for families.

This insurance is going to pay for any injuries sustained by members of your family, especially the ones you are responsible for.

It would be best to consider the following when choosing personal liability insurance:

  • Your employment status
  • The location of your home
  • Your industry
  • The number of people in your care 

Professional Liability Insurance

This insurance sees to it that your enterprise or business is shielded from whatever might follow a service that puts your customer in the face of danger. 

Let’s say you advised your customer to do a particular thing, and they ended up in trouble. This insurance covers whatever costs may follow.  

Insurance like this is a must for you if you offer regular services. It can even help your business grow because customers are going to be sure that you have their best interest at heart.

Read: Top 15 Car Dealers in Nigeria

Liability insurance for drivers

In Nigeria, liability insurance for drivers is also known as automobile insurance. 

It pays for damages to your vehicle(s) which you aren’t directly responsible for. Accidents. Natural disasters. Etc. 

There are many, many kinds of driver’s insurance in Nigeria. Be sure to choose the one which is best for you. 

Legal Insurance

Legal insurance pays for access to the law and legal systems of your state. It covers the cost of anything legal in regards to you as a person. Consultations. Advice. Court representations, etc.

Read: Do you need legal insurance in Nigeria?

Which liability insurance should I pick?

This, chiefly, depends on what you do.

If you are an employer, it is imperative that you get employer’s insurance, especially in Lagos. You are required to, after all. If you feel as though you will be exposed to legal issues, then get legal insurance. If you own vehicles, get automobile insurance. Etc. 

How can I buy Liability Insurance?

You can buy liability insurance directly from any insurer in Nigeria. Or, still, you can get one from a broker. There are many brokers out there. Consider AXA MansardLead Way, and African Alliance, amongst others.

How much does Liability Insurance cost in Nigeria?

The cost of liability insurance in Nigeria will depend on:

  • Type of insurance 
  • Your payment plan 
  • Your company’s annual income. 
  • The number of people in your household, etc. ( For personal liability insurance)

For small businesses in Nigeria, expect insurance to be around N10,000 a month.

Photo by Daniel Tausis on Unsplash

By Allison

Allison is enthusiastic about finding information and sharing guides about Lagos. He also covers all exciting topics about Africa at Lonely Africa. He lives in Lagos with his wife Antje and cat Leo and loves fabric crafting, and watching TV in his spare time.

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