Airports Insurance Cover Faces Scrutiny as Privatization Looms: Balancing Safety, Risk, and Economic Reform

As Nigeria advances with its ambitious plan to privatize and concession key airports, a critical yet under-discussed issue has surfaced: the future of airports’ insurance cover. While privatization is expected to enhance efficiency, attract private investment, and modernize infrastructure, aviation experts and insurers warn that insurance responsibilities could become fragmented if not carefully addressed.

For decades, the Federal Airports Authority of Nigeria (FAAN) has borne the responsibility of insuring the country’s airports. This insurance has served as a vital safety net, covering fire, infrastructural damage, accidents, and third-party liabilities, ensuring that both passengers and airlines operate with confidence.

But with concessionaires preparing to take over management of major airports, questions now arise:

• Who will carry the responsibility for comprehensive insurance coverage?
• Will existing policies extend to concession-operated terminals?
• How will new arrangements affect premium costs, liability sharing, and risk evaluation?

Flashback to Past Lessons

A reflection on the early 2000s shows that gaps in insurance coverage once plagued Nigeria’s aviation industry. Inconsistent premium payments, valuation disputes, and bureaucratic delays nearly exposed the sector to catastrophic risk. Industry stakeholders fear a repeat of such lapses if privatization proceeds without a solid insurance framework.

Expert Concerns

Industry stakeholders are already voicing concerns. A senior official at FAAN, speaking under condition of anonymity, noted:

“Insurance is one of the pillars of aviation safety. Privatization must not create loopholes where some facilities are covered and others are left exposed. If a disaster occurs, the sector, and ultimately the Nigerian economy, will bear the cost.”

Insurers are also urging caution. Mr. Shadrach Adegoke, a risk manager in the aviation sector, stressed:

“Aviation insurance is complex and highly specialized. Concessionaires must be mandated to maintain internationally compliant coverage. Any gap, no matter how small, can erode investor confidence and expose passengers and assets to unnecessary risk.”

Aviation analysts highlight the broader implications. According to an independent aviation consultant:

“Privatization is meant to build efficiency and attract investment, but investors want certainty. Clear rules on who pays premiums, who bears liabilities, and how claims will be handled are non-negotiable if Nigeria wants global trust in its airports.”

The Bigger Picture

Insurance is more than just compliance—it is the invisible shield of confidence that safeguards billions in infrastructure, millions of passengers, and Nigeria’s credibility in global aviation. Without robust coverage, foreign investors, airlines, and regulators could view Nigeria’s aviation sector as vulnerable, undermining the reform objectives of privatization.

Experts argue that a harmonized policy framework, involving FAAN, concessionaires, the Ministry of Aviation and Aerospace Development, and the National Insurance Commission (NAICOM), is essential. Such a framework would ensure seamless, transparent, and mandatory insurance cover for all airports, regardless of management structure.

Reflection and Way Forward

As Nigeria stands on the edge of this major reform, the aviation industry must reflect on a vital lesson: insurance must never be an afterthought. Strong coverage will protect not just physical assets, but also the trust and safety of every passenger and operator in Nigeria’s skies.

The looming privatization presents an opportunity, not just to modernize infrastructure, but also to set global standards in risk management, transparency, and investor confidence.

As Nigeria prepares for airport privatization, concerns grow over the future of airports’ insurance cover. Experts from FAAN, insurers, and aviation analysts warn of risks if responsibilities are fragmented. Discover why a robust insurance framework is vital to safeguard lives, assets, and investor trust in Nigeria’s aviation sector.