Error Could not open command file for update.md

Error: Could not open command file '/usr/local/nagios/var/rw/nagios.cmd' for update!
The permissions on the external command file and/or directory may be incorrect. Read the FAQs on how to setup proper permissions.
An error occurred while attempting to commit your command for processing.

Return from whence you came

Change file permissions as show below

chown nagios:nagcmd /usr/local/nagios/var/rw
chmod g+rwx /usr/local/nagios/var/rw
chmod g+s /usr/local/nagios/var/rw