The Application of the Doctrine of Privity of Contract to Insurance Contract in Nigeria

Abstract

By the nature of Insurance Contracts, the insurer undertakes to indemnify the insured in the event of the happening of unforeseen occurrences. For liability Insurance contracts, the insurer undertakes to indemnify the insured in case of liability to a third party, thus the insurance contract is taken for the benefit of the third party. The critically question then arises, can the third party sue the insurer directly for the liability guaranteed under the contract of insurance? The long established common law doctrine of privity of contract answers this question in the negative, however statutory provisions has modified the applicability of this principle in relation to insurance contracts in Nigeria. The aim of this Article is to examine the statutory provisions that whittled down the effect of the doctrine of privity of contract to insurance contract in Nigeria and the judicial interpretation given by the Courts to these provisions to determine how well there have protected third parties.