Airports Lack Insurance Protection, Leaving Government Vulnerable to Financial Losses and Payout Demands

The Federal Government may be forced to bear the full financial cost of the recent fire incident at the Murtala Muhammed International Airport's international terminal, as it appears that the airport lacks insurance coverage. The airport is managed by the Federal Airports Authority of Nigeria, FAAN.

n

Findings have revealed that no insurance company has reported claims exposure or liability related to the airport fire disaster, several months after the incident, raising concerns about the lack of insurance protection for critical aviation infrastructure in the country.

n

The government will not only have to finance the rehabilitation of the burnt terminal, estimated to cost over one billion Naira, but also compensate affected victims and settle all medical expenses resulting from the incident. This is despite the Federal Executive Council's earlier approval of N712.26 billion for the comprehensive rehabilitation of Terminal One of the airport before the fire outbreak.

n

Commissioner for Insurance, Mr. Olusegun Omosehin, stated that no insurance company has paid claims in respect of the airport fire incident, saying "I am not aware of the entities that covered the airport, if there was cover on that property, claims must be paid, that is where we stand."

n

Industry experts have noted that while aviation regulations require all aircraft operating in the country to maintain insurance cover, there is no regulatory requirement compelling airport operators to insure airport terminals and related infrastructure.

n

The development has highlighted concerns over risk management practices in the aviation sector, particularly regarding the protection of strategic national assets against fire and other operational hazards.

n

Financial findings indicate steady growth in combined aviation and marine insurance premiums, with the strongest growth in the past five years occurring in 2024, when the insurance industry's total premium expanded by 50 and aviation and marine insurance premium surged by 73.9 per cent to N128.2 billion from N73.7 billion.

n

In 2025, the industry sustained its expansion trajectory, with total premium income increasing by 47.5 per cent, while aviation and marine insurance premium rose by 45.9 per cent to N187.1 billion from N128.2 billion.

n

Aviation analyst, Grp. Capt. John Ojikutu, retd, stated that the absence of comprehensive insurance coverage for airports could expose the government to huge financial losses and compensation claims in the event of major disasters.

n

Ojikutu noted that earlier provisions of the Nigerian Civil Aviation Regulations required international airports to maintain insurance coverage of about $250 million, while domestic airports were expected to carry coverage of around $100 million, but the new regulation has removed this provision.

n

Former General Manager, Public Affairs for defunct Nigeria Airways, Mr. Chris Aligbe, emphasized the importance of insuring airports, saying it is crucial for airports to be insured, as in other countries, the amount of money used to develop or renovate airports is usually not spent by governments.

n

Mr. Sunny Adeda, former President of the Chartered Insurance Institute of Nigeria, CIIN, said that aviation as an industry is international in nature, and therefore aviation insurance is affected in the international market more than any other branch of insurance.

n

Adeda noted that while the Nigeria aviation sector ensures that every aircraft operating in the Nigeria airspace is insured, such cannot be said of the airports, and that aircraft are high-valued and therefore value at risk is quite high.

n

Former President of the Nigerian Council of Registered Insurance Brokers, NCRIB, Mr. Babajide Olatunde-Agbeja, said that the airports used to be insured about 10-12 years ago, but he is not certain about the current status, and that the full brunt of renovating the airport will fall on the shoulders of government.

n

Olatunde-Agbeja emphasized the need for government assets to be insured, saying that when he was president of NCRIB, they liaised with government and issued a circular mandating all parastatals, ministries, departments, and agencies to ensure that all government assets are insured.