The Nigerian maritime industry is a major sector of the economy. It is the second largest revenue earner for the government after Oil and Gas and provides about two point three million jobs annually.
It handles over 90% of the country’s import and exports, thus playing a key role in Nigeria’s economic development.
The Managing Director of the Nigerian Ports Authority, NPA, Mohammed Bello-Koko said that NPA generated the sum of N501bn in 2023, while the Nigerian Maritime Administration and Safety Agency NIMASA generated the sum of N37.7b 2021, and the Nigerian Shipper’s Council earned over N2.5 billion between 2020 and 2022.
The BB nature of Maritime business the world over made it susceptible to high risks, hence the need for insurance cover for the different risks that they are exposed to.
Maritime insurance in Nigeria refers to the insurance coverage provided for ships, vessels, cargo, and other marine-related risks within Nigerian waters.
It is an essential component of the maritime industry, which plays a significant role in Nigeria’s economy due to its vast coastline and active seaports.
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Maritime insurance typically includes various types of coverage such as hull insurance (covering physical damage to the vessel), cargo insurance (covering loss or damage to goods being transported), liability insurance (covering legal liabilities arising from maritime activities), and other specialized policies tailored to the needs of shipowners, cargo owners, and other stakeholders in the maritime sector.
In Nigeria, maritime insurance is regulated by the National Insurance Commission NAICOM, which oversees the insurance industry as a whole. Insurance companies operating in Nigeria offer various maritime insurance products and services to cater to the needs of businesses involved in maritime trade, shipping, and related activities.
Given the importance of maritime transportation for Nigeria’s import and export trade, as well as its oil and gas industry, maritime insurance plays a critical role in managing risks and ensuring the smooth operation of maritime activities in the country.
Insurance coverage in the maritime industry is essential due to the significant risks involved in maritime activities such as vessel operations, cargo transportation, port operations, and offshore activities.
Types of Maritime Insurance
Marine Hull Insurance: This type of insurance covers physical damage to ships and vessels. It includes coverage for hull, machinery, and equipment. Marine hull insurance protects shipowners against risks such as collisions, groundings, fires, and piracy.
Protection and Indemnity (P&I) Insurance: P&I insurance covers liabilities and expenses arising from third-party claims, including bodily injury, property damage, pollution, and wreck removal. It protects shipowners, operators, and charterers against legal liabilities that may arise from their maritime operations.
Cargo Insurance: Cargo insurance covers loss or damage to cargo during transit by sea, air, or land. In the Nigerian maritime industry, cargo insurance is crucial for importers, exporters, freight forwarders, and logistics companies to protect their goods against risks such as theft, damage, or loss.
Port and Terminal Operators Insurance: Port and terminal operators need insurance coverage to protect their facilities, equipment, and liabilities.
This type of insurance may include coverage for property damage, business interruption, liability for injuries or accidents on the premises, and environmental liabilities.
Offshore Insurance: Offshore insurance provides coverage for oil and gas exploration, production, and related activities in Nigeria’s offshore oil fields. It includes coverage for offshore platforms, drilling rigs, pipelines, and associated liabilities.
War Risk Insurance: Given the presence of piracy and other security risks in certain maritime areas, war risk insurance provides coverage for losses or damages caused by warlike actions, acts of terrorism, or political unrest.
Insurance coverage in the Nigerian maritime industry is typically provided by local and international insurance companies, brokers, and P&I clubs. The Nigerian Maritime Administration and Safety Agency (NIMASA) regulates and oversees maritime activities, including insurance requirements, to ensure compliance with national and international standards.
