How to Resolve Insurance Disputes in Nigeria (2024)

Insurance disputes are a common occurrence in Nigeria, and resolving them can be a complex process. Insurance companies and policyholders may have different interpretations of policy terms and conditions, leading to disagreements and disputes. These disputes can arise in various types of insurance, including life insurance, health insurance, and property insurance.


When it comes to resolving insurance disputes in Nigeria, there are several options available. One option is to seek the assistance of the Consumer Protection Council (CPC), which is a government agency that helps to resolve disputes between consumers and businesses. Another option is to seek the assistance of an ombudsman, which is an independent third party that can help to mediate disputes between policyholders and insurance companies. Additionally, policyholders can also seek legal assistance from a lawyer who specializes in insurance law.


Insurance disputes in Nigeria are a common occurrence, and they can arise from various issues such as contract disputes, commercial disputes, and other related disputes. In Nigeria, the resolution of insurance disputes is governed by the Insurance Act, which provides that disputes arising from insurance contracts should be resolved through arbitration.

Arbitration is a form of alternative dispute resolution (ADR) that involves the appointment of an arbitrator or a panel of arbitrators to resolve a dispute. The arbitrator’s decision is binding on the parties involved, and it can be enforced by the court. The use of arbitration in resolving insurance disputes in Nigeria is encouraged because it is faster, cheaper, and less formal than litigation.

In Nigeria, the jurisdiction of insurance disputes is determined by the type of risk involved. The Federal High Court has exclusive jurisdiction over insurance disputes that relate to the risks contained in Section 64 to 68 of the Insurance Act. However, where the dispute is in respect of any other risk outside those contemplated by Section 64 to 68 of the Act, the State High Court has jurisdiction.

To avoid insurance disputes in Nigeria, it is essential to ensure that the insurance contract is clear, unambiguous, and covers all the risks involved. The parties involved should also ensure that they comply with the terms of the contract and promptly notify the insurer of any loss or damage.


When an insurance dispute arises, there are several methods available to resolve the issue. These methods include mediation, litigation, arbitration, and conciliation. Each method has its own advantages and disadvantages, and the parties involved should carefully consider which method is best suited to their specific situation.


Mediation is a form of alternative dispute resolution (ADR) that involves a neutral third party who facilitates communication between the parties and helps them reach a voluntary and confidential agreement. Mediation is a non-binding process, and the parties can choose to accept or reject the mediator’s recommendations. Mediation is often a faster and less expensive method of resolving disputes compared to litigation or arbitration.


Litigation is a legal process in which the parties present their case to a court, and a judge makes a binding decision. Litigation can be a lengthy and expensive process, and the parties may not have control over the outcome. However, litigation can be a useful method of resolving disputes when the parties cannot reach an agreement through other means.


Arbitration is another form of ADR in which the parties present their case to an arbitrator or panel of arbitrators who make a binding decision. The process is similar to litigation, but the proceedings are less formal and more flexible. Arbitration can be a faster and less expensive method of resolving disputes compared to litigation, and the parties have more control over the outcome.


Conciliation is a voluntary and confidential process in which a neutral third party helps the parties reach an agreement. Unlike mediation, the conciliator can suggest solutions and make recommendations, but the parties have the final say. Conciliation can be a useful method of resolving disputes when the parties want to maintain a relationship or when the dispute involves complex technical issues.

In Nigeria, the Arbitration and Conciliation Act provides a legal framework for arbitration and conciliation. The Act establishes the jurisdiction of the arbitral tribunal and provides for the enforcement of the arbitral award. The Act also provides for the confidentiality of the arbitration proceedings and the neutrality of the arbitrator.


In resolving insurance disputes, evidence plays a crucial role in determining the outcome of the dispute. Evidence refers to any information, documents, or testimony that can help prove or disprove a claim. It can include physical evidence, such as photographs or videos, as well as witness statements and expert opinions.

Under Nigerian arbitration law, evidence is admissible in arbitration proceedings. The arbitrator has the power to determine the admissibility, relevance, and weight of any evidence presented by either party. However, the arbitrator must ensure that the evidence is obtained in a fair and impartial manner, and that both parties have the opportunity to examine and cross-examine any witnesses.

In insurance disputes, evidence can be used to establish the facts surrounding the claim, such as the cause of the loss or damage, the extent of the loss or damage, and the value of the claim. It can also be used to establish whether the insured party complied with the terms and conditions of the insurance policy, such as providing timely notice of the claim and cooperating with the insurer’s investigation.

Impartiality is also crucial in the use of evidence in resolving insurance disputes. The arbitrator must remain impartial throughout the proceedings and consider all evidence presented by both parties. Any bias or prejudice towards either party can compromise the fairness and integrity of the arbitration process.


When it comes to resolving insurance disputes in Nigeria, negotiation and settlement agreements can be an effective way to avoid going to court. Negotiation is a process where the parties involved in a dispute try to reach a mutually acceptable solution. This can be done through direct negotiations, or with the help of a neutral third party, such as a mediator.

In many cases, a settlement agreement can be reached through negotiation. A settlement agreement is a legally binding contract that outlines the terms of the settlement. It is important to ensure that the settlement agreement is clear, concise, and includes all the necessary terms and conditions.

Confidentiality is also an important consideration when negotiating a settlement agreement. Parties may wish to keep the details of the settlement agreement confidential to avoid any negative publicity or damage to their reputation. A confidentiality clause can be included in the settlement agreement to protect the parties involved.

It is important to note that settlement negotiations are generally protected from being used against the parties involved in future legal proceedings. This is known as the “without prejudice” rule. The rule provides that evidence of settlement negotiations is not admissible in court to prove or disprove the validity or amount of a disputed claim.


Effective communication is a key factor in resolving insurance disputes in Nigeria. Poor communication can lead to misunderstandings, delays, and even legal action. It is important for both parties to communicate clearly and effectively to reach a mutually beneficial resolution.

When dealing with an insurance dispute, it is essential to keep lines of communication open. The insured party should provide all necessary documentation and information to the insurer in a timely manner. The insurer, in turn, should keep the insured party informed of any developments in the case.

Communication should be respectful and professional at all times. Emotions can run high in insurance disputes, but it is important to remain calm and objective. Insured parties should avoid making threats or becoming confrontational, as this can damage the relationship with the insurer and hinder the resolution process.

In some cases, communication alone may not be enough to resolve an insurance dispute. In such cases, other methods such as arbitration or conciliation may be necessary. These methods can help both parties reach a fair and impartial resolution without the need for litigation.

Arbitration involves a neutral third party who listens to both sides and makes a decision that is legally binding. Conciliation, on the other hand, involves a mediator who helps both parties reach a mutually beneficial agreement. These methods can be faster and less expensive than going to court, but they require both parties to be willing to participate in good faith.


Resolving insurance disputes in Nigeria can be challenging due to several factors. This section will discuss some of the common challenges faced in resolving insurance disputes in Nigeria.


One of the significant challenges to resolving insurance disputes in Nigeria is the security situation in the country. Nigeria has been plagued by various security challenges, such as terrorism, banditry, and kidnapping, which have made it difficult to resolve disputes. Insurance companies and their clients are often affected by these security challenges, leading to delays in resolving disputes.


Another challenge to resolving insurance disputes in Nigeria is jurisdictional challenges. Jurisdictional challenges arise when parties to a dispute are unsure of which court has the authority to hear and determine their case. This challenge is particularly prevalent in Nigeria, where there are several courts with overlapping jurisdictions. This often leads to delays and confusion in resolving disputes.

To address this challenge, parties to an insurance dispute in Nigeria should ensure that they are aware of the jurisdictional rules that apply to their case. They should also seek the advice of legal professionals who are familiar with the Nigerian legal system.


In conclusion, resolving insurance disputes in Nigeria requires a thorough understanding of the legal frameworks, dispute resolution mechanisms, and the roles of the various entities involved. Insurance companies must ensure that their policies have clear dispute resolution clauses that comply with the relevant laws and regulations.

Appraisal is an essential aspect of resolving insurance disputes, and parties must ensure that they engage competent and impartial appraisers. In the case of employment disputes, the parties must follow the relevant procedures as stipulated in the Labor Act.

Partnerships in resolving disputes are also crucial, and parties can engage the services of experienced mediators, arbitrators, or lawyers. The use of alternative dispute resolution mechanisms such as mediation and arbitration can save time and costs associated with litigation.

It is also important to note that parties must act in good faith and cooperate with each other during the dispute resolution process. Failure to do so may result in further complications and delays in resolving the disputes.

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Oluchi Chukwu

Oluchi is a seasoned Information blogger, content developer and the editor of Nigerian Queries. She is a tech enthusiast who loves reading, writing and research

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