Joy Agwunobi
Nigerian entrepreneurs face one of the toughest business environments in the world, yet a majority of the country’s small and medium-sized enterprises (SMEs) continue to operate without insurance, essentially gambling with the very survival and future of their businesses.
According to a survey conducted by Intelpoint, 96.4 per cent of Nigerian businesses have no insurance coverage, exposing them to risks ranging from fire and flood to theft, lawsuits, and business disruptions. In an environment lacking social security and institutional safety nets, this level of exposure leaves entrepreneurs vulnerable to total collapse.
This was the center focus during a recent webinar titled “Business Protection Insurance: What Every Entrepreneur Should Know,” organised by Coronation Insurance PLC, where industry professionals voiced growing concern over the widespread dependence on luck and faith in place of structured risk management—an approach they say is not only shortsighted but potentially disastrous.
Ayo Bankole Akintujoye, founder of Caladium Consulting, underscored the dangers of operating without risk management, stating, “Hope is not a strategy in business. Faith is not a strategy.Imagine being on a plane, and the pilot announces that one engine has failed, but they are hoping for the best. The panic that would ensue is exactly what happens when entrepreneurs fail to prepare for risks. It’s as illogical as it is irresponsible.”
Akintujoye pointed out that while entrepreneurship inherently involves risk, many of those risks can and should be transferred to an insurance provider. He stressed that beyond operational risks, external threats such as natural disasters or major accidents can instantly derail a business. “Why deal with avoidable losses when insurance exists to shoulder that burden?” he asked.
Citing Nigeria’s high SME failure rate—80 percent within the first five years—Akintujoye underscored how unmitigated risks contribute to business mortality. He recalled the case of a logistics business owner who lost both his trucks in a road accident. The goods in transit were uninsured, leaving both the business owner and his customer in financial ruin. Community members eventually rallied through crowdfunding to support him, but the business never recovered.
“This was a catastrophe that could have been prevented with the right insurance policy,” Akintujoye said. “Yet many Nigerian entrepreneurs continue to underestimate the value of risk cover until it’s too late.”
According to him, business protection insurance serves as a critical safety net, especially in a country like Nigeria where economic support structures are weak. “There’s no free healthcare, no access to quality education, and no government support if your business collapses. If your business fails, your entire livelihood can disintegrate. That’s why insurance isn’t just optional—it’s vital.”
Aside from being a mere fallback tool, Akintujoye described insurance as a strategic growth enabler. For startups and SMEs seeking investment or credit facilities, having insurance demonstrates foresight and risk consciousness—qualities that earn trust from stakeholders.
“When you pitch to investors and show them the insurance layers you’ve built into your business, they see that you’re thinking not just of profits but of long-term sustainability. It gives them the confidence that their investment is protected,” he said.
Insurance, he added, also strengthens contract management and enhances reputation in dealings with vendors, clients, and financial partners. “If a contract is insured, your counterparty sees you as credible. It’s a sign of seriousness and professionalism.”
While many entrepreneurs often believe insurance is the preserve of large corporations or high-revenue operations, Akintujoye debunked this myth, arguing that tailored insurance products now exist for businesses of all sizes—including the smallest startups.
He noted that Nigerian business owners often dismiss insurance as irrelevant or unaffordable, frequently asking, “What am I even selling that needs to be insured?” or claiming, “I haven’t started making real profits yet.” But these responses, he said, reveal a deeper problem: a widespread lack of awareness. “Most SME owners have never taken the time to speak to an insurance advisor or explore what’s actually available to them,” he said.
Contrary to popular belief, Akintujoye emphasised that many business protection policies are surprisingly affordable—some costing less than what entrepreneurs spend on mobile data each month. With many SME operators already budgeting between ₦10,000 and ₦30,000 on data subscriptions alone, he argued, the idea that insurance is financially out of reach simply doesn’t hold up. “There are cost-effective options that provide coverage for your most critical assets. Insurance is not expensive. It’s just misunderstood,” he stressed.
Akintujoye also elaborated on the variety of insurance policies that Nigerian businesses can adopt, highlighting that protection is not one-size-fits-all. From property and all-risk coverage to goods-in-transit and motor insurance, the options are designed to address sector-specific needs. For instance, logistics businesses can benefit from goods-in-transit policies, while office-based companies may find property insurance more suitable.
Beyond operational coverage, he pointed to employee-focused options like group life insurance, which can help retain talent, and business interruption insurance that cushions against unexpected disruptions—be it a flood, fire, or prolonged power outage.
He added that even niche offerings now exist, allowing businesses to insure individual items like mobile phones, air conditioners, or specialised machines. “Ultimately, it comes down to understanding your business model and finding coverage that aligns with your risk exposure,” he said.
Beyond buying policies, Akintujoye urged business owners to work with credible insurers with strong financial backing and group affiliations, as these players are more likely to honor claims and provide reliable support in times of need, stating “Smart businesses don’t wait for disaster before insuring, Protection is cheaper than recovery. And once you’ve put sweat equity into your business, you can’t afford to be penny-wise and pound-foolish.”
He concluded with a compelling call to action for Nigerian SMEs: “Anything can happen—floods, fire, theft, even the sudden loss of a key employee. The only true safety net in our system is insurance. If you value your business, insuring it should be one of your first moves, not a last resort.”
In Ghana, the challenge of underinsurance among small businesses mirrors the Nigerian experience particularly in informal market areas highly prone to fire outbreaks.
Felix Boateng, head of underwriting at Coronation Insurance Ghana, noted that fire-related disasters have become a persistent problem in commercial hubs between 2020 and 2025, especially in markets constructed with highly flammable materials.
“Every year, we’ve recorded fire incidents, especially in market zones. These areas are often built with wood and other flammable materials, which makes them difficult or even impossible to insure,” he said.
Boateng explained that many of these structures fail to meet even the most basic safety and construction standards required for insurance coverage. This recurring issue, he added, has sparked critical conversations within the industry about how to extend protection to small traders operating in high-risk environments.
“We consistently advise market traders to support government initiatives aimed at developing safer and more durable infrastructure,” he said. “Such improvements would make it easier for insurers to offer viable coverage options in these areas.”
However, he lamented that despite repeated awareness efforts, many traders revert to the same unsafe building practices after each disaster, essentially re-entering a cycle of vulnerability.
“Regardless of how difficult it is, we are continuing our education and outreach in these markets. Business owners need to understand that operating in a high-risk area without insurance puts everything at stake,” he said.
He urged small traders to recognise that even a single major incident can destroy years of work, stating, “You might be making profit now, but one incident can wipe it all away. Insurance helps make your business sustainable—not just for today, but for the future and generations to come.”
On her part, Flora Mbeledeogu, founder and CEO of MABA, argued that insurers need to adopt more aggressive outreach strategies, similar to what the banking sector has done in financial inclusion, stating, “Insurance companies need to be louder, clearer, and more persistent in their messaging. The lack of adoption is not just due to apathy; it’s a lack of awareness.”
She urged insurers to segment and simplify their offerings for SMEs especially those in the informal sector. According to her, when insurance feels abstract or tailored only for large enterprises, micro and small business owners simply tune out.
“A bakery and a manufacturing plant do not need the same insurance. We need plans that are simple, relatable, and specific to each business model. Entrepreneurs need to feel that insurance speaks directly to them,” she noted.
Mbeledeogu called for frequent advisory sessions, targeted awareness campaigns, and practical business workshops to help SMEs better understand their operational risks and how to mitigate them noting that only then will insurance move from being a vague idea to a functional business tool in the Nigerian context.
In his welcome address, Adewale Adeneye, executive director of technical operations at Coronation Insurance Plc, emphasised the strategic importance of insurance as a safeguard against unforeseen business risks, ranging from natural disasters to legal liabilities.
“As entrepreneurs and business owners, we are often focused on growth, innovation, and scaling up. We invest time, energy, and resources into building our businesses while navigating the daily realities of a fast-paced and competitive market,” he said. “However, amid the pursuit of success, one critical element is often overlooked—protection. In today’s dynamic business environment, risk is a constant companion, whether in the form of natural disasters, lawsuits, or operational disruptions.”
Adeneye warned that such unpredictable events could cripple even the most promising ventures if not adequately prepared for. “This is where business protection insurance becomes essential. It is not merely a cost—it is a strategic instrument that preserves the continuity of your business and secures both your assets and your achievements,” he added.
He explained that understanding and embracing insurance is a proactive step toward long-term stability. “This session is more than an information-sharing platform; it’s an opportunity for business owners to take deliberate action towards securing their enterprises. The goal is to empower you to make informed decisions that support sustainable growth and resilience,” Adeneye concluded.
