Insurance and Infrastructure Finance: The Role of Construction All-Risk Insurance in Nigeria

This study examines the role of Construction All-Risk (CAR) insurance in supporting infrastructure finance and project delivery in Nigeria. CAR insurance provides comprehensive coverage for civil engineering and building projects against physical damage, third-party liability, and machinery breakdown risks during construction phases. As Nigeria pursues an ambitious infrastructure development agenda encompassing roads, bridges, power plants, and housing, understanding the current market for construction insurance and its adequacy is important for both project financiers and risk managers. This research employs a professional practice design with data from 35 construction risk underwriters, 20 project finance officers at development finance institutions, and 15 infrastructure project managers at selected firms operating in Abuja and Lagos. Questionnaires and expert interviews assess CAR policy coverage adequacy, premium rate competitiveness against international benchmarks, claims experience on major infrastructure projects, and gaps in CAR policy enforcement by project principals. Secondary data from the Federal Ministry of Works and Housing on public works insurance requirements supplement primary findings. Preliminary findings are expected to indicate significant under-insurance of public infrastructure projects and limited local capacity for large civil engineering risk underwriting. Keywords: Construction All-Risk Insurance, Infrastructure Finance, Project Risk, Nigeria, CAR Insurance.