The principle of indemnity is the cornerstone of every indemnity insurance, which functions to ensure that in the event of losses, the insured party receive full compensation and nothing more. To support the goals of indemnity in insurance law, other related doctrines like insurable interest and subrogation have been established. The primary purpose of the thesis is to critically evaluate and reconcile the problems found in Nigerian insurance laws on insurable interest and subrogation that are inconsistent with the principle of indemnity with principal reference to the English laws, and Australian laws, but not exclusively. There is significant evidence in the literature that some rules of insurable interest and subrogation applied to insurance contracts cause problems in practice, and to some extent, contradict the aims of the principle of indemnity. These legal principles of insurance law have undergone legislative reforms in other common law countries, but to date, there have been no similar developments in Nigeria. However, limited research exists that directly questions why the principle of indemnity is undermined, particularly for the insured’s interest. To achieve the objective of this study, the thesis examines the principle of indemnity and related doctrines in Nigerian insurance law and practice: A comparative study with the counterparts in other jurisdictions.

This study is a qualitative legal research and adopts a doctrinal and comparative legal research methodology to investigate the approaches of recent developments, particularly in common law countries. The research shows that the requirement of insurable interest under sec 7, MIA 1961(Nig.) is restrictive, with harsh consequences which not only defeats a legitimate commercial transaction but also deprives the insured unjustly of recovering economic losses. More seriously, the insurers often use the strict rule as a technical objection to avoid liability which leaves the insured in a lose all position and the insurer in a gain all position. The research also shows that sec 80, MIA 1961 (Nig.) has failed to address how subrogation recoveries ought to be distributed where there is a competing interest between the insured and the insurer. The research further reveals that these problems have not been addressed by the current Nigerian Insurance (Consolidated) Bill 2016. The thesis concludes with suggested reforms, including detailed draft legislative amendments on how the problematic rules of insurable interest and subrogation under Nigerian insurance laws, in line with global practices can be modified to conform with the nature of the principle of indemnity.