Can my Negligence be insured?

Can my Negligence be insured?

An Accra High court has fined the 37 Military Hospital an amount of ¢1,075,000 for medical negligence which resulted in the death of a 27-year-old pregnant woman. The court ruling is the outcome of a suit filed by the plaintiffs (father and the husband of the deceased, a retired Captain of the Ghana Armed Forces) after the death of Helena Brema Nyamekye, a Ph.D. Student of the University of Ghana (myjoyonline, 2021).

In another recent news, the General Jurisdiction Division of the Accra High Court has ordered Nyaho Healthcare Limited to release the complete medical records of a woman who has sued the hospital for medical negligence. The court presided over by Justice Charles Gyamfi Danquah, held that the healthcare service provider had not denied its possession and custody of the document prayed for by the plaintiff, Mrs. Jehu-Appiah.

The court also awarded a cost of GH¢2,000 against the hospital. (peacefmonline,2021)

What is the meaning of a professional and why will a court bring these charges against them? The original meaning of professional derived from the Middle English profes, an adjective meaning having professed one’s vows, which itself derived from late Latin professus, past participle of profitēri which meant to profess, confess. The idea was that professionals were those who ‘professed’ their skill to others, and ‘vowed’ to perform their profession to the highest standard. In its original meaning, the essence of being a professional was to have made a public commitment to a high standard of performance, integrity, and public service.

The definition of professional negligence is when a professional fails to perform their responsibilities to the required standard or breaches a duty of care. This poor conduct subsequently results in a financial loss, physical damage, or injury of their client or customer. A claim of professional negligence can be made against anyone considered to have expertise in the services they provide; for example, a technology or management consultant, surveyor, Doctor, Lawyer, Engineer, Insurance Broker, etc. For the claim to be successful there must be evidence that the service provided fell below the standards of their profession, resulting in negative consequences. Professional indemnity insurance can help to cover the cost of compensation claims, or legal fees if a claim of professional negligence is made against your business.

The purpose of Professional Indemnity insurance is to protect the professional person. It protects them against the legal liability to pay damages to persons who have sustained financial loss arising from their professional negligence or that of their employees in the conduct of the business. Professionals, consultants, and advisers commonly earn income by charging fees for their services. However, even where the advice given does not involve a fee, there may still be a liability for errors and omissions. For example, ‘not-for-profit organisations such as charities, museums, and trade unions may find themselves exposed to litigation following mistaken advice.

Professional Liability (PI) policies do not have a standard wording. Practice varies among insurers and most insurers have different ‘standard’ wordings for different purposes. This is the operative clause of PI;

“The Insurance Company will Indemnify the Insured up to the limit of liability specified in the schedule against liability at law for damages and claimants’ costs and expenses in respect of claims for breach of professional duty made against the insured during the period of insurance by reason of any neglect, error or omission occurring in the course of the business and committed by the Insured or any predecessor of the insured in the business or by any employee of the insured or such predecessor”.


The policy covers the insured, all previous partners, and employees. The limit of indemnity is an aggregate limit for any one period of insurance. This means that on payment of a claim, the aggregate limit is reduced by the appropriate amount until the next renewal date.


Many Professional Liability claims are expensive and the limit of indemnity should be as high as possible to reflect the catastrophic nature of the risk. The standard policy excludes other perils and some are stated below;

  • Liability for TP injury/property damage, unless arising out of advice, design, or omission to perform a professional duty;
  • Deliberate, dishonest, and fraudulent acts of an employee;
  • War, radioactive contamination, and sonic bangs;
  • Seepage, pollution, or contamination of any kind.

The PI policy could be extended to cover other perils like a fidelity guarantee. This is at the acceptance and approval of the insurer.

The new insurance Act 2021, Act 1061 Section 216 states the requirement to insure and maintain professional indemnity insurance. This means it is now compulsory for certain professions or professional institutions to have this policy.

An employer of the following professional persons are to have professional indemnity insurance;

  1. Accountants
  2. Medical doctor
  3. Insurance practitioners
  4. Lawyers
  5. Financial and investment analysts
  6. Any other profession that may be specified by Regulations shall insure and maintain insurance under any qualifying professional indemnity insurance contract with a licensed insurer for the professional person.

An employer that contravenes this Act by not having this policy commits an offence and is liable on summary conviction to a fine or a term of imprisonment or to both as specified in the Act.

A professional indemnity insurance contract shall indemnify the insured professional against;

(a) the liability of the professional person for loss or damage caused to another person where the claim arises from

(i) a negligent act, error or omission, a negligent misstatement or misrepresentation, or a breach of a duty of care in connection with the carrying on by the person of the business;

(ii) the dishonesty of the employees of the insured professional or persons engaged under a contract for services and, in the case of a body corporate, the directors of the body corporate; or

(iii) the loss and theft of documents and data, including the cost of replacement, the reinstatement of data, and the increased cost of working;

(b) the legal and other costs connected with defending a claim and the cost of investigating and settling such a claim.

To sustain a claim against the doctor, the patient must prove that the doctor has been negligent.

Written by: Justice Peprah AGYEI.

The writer is a staff of the National Insurance Commission. He is also the Leading Managing Partner of Jusbel Risk Consult limited. He is a Chartered Insurer and an Associate of the Chartered Insurance Institute of United Kingdom and also Ghana (ACII-UK, ACIIG), and holds MPhil in Enterprise Risk Management and Business Consulting from Kwame Nkrumah University of Science and Technology. Attained Bachelor’s degree from University of Ghana, Legon and have Applied Insurance studies, Diploma and Advanced Diploma (AAIS & AIS) from Ghana Insurance College / Malta Insurance Training Institute.

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About the Author
Justice Peprah Agyei
Chartered Insurance Practitioner || MPhil || CPCU|| ACII || ACIIG || BA (Hons) || Writer   The writer is a Chartered Insurance Practitioner of United State of America, USA, United Kingdom, UK and Ghana (CPCU, ACII, ACIIG), and holds MPhil in Enterprise Risk Management and Business Consulting from Kwame Nkrumah University of Science and Technology, attained Bachelor’s degree from University of Ghana, Legon and have Applied Insurance studies, Diploma and Advanced Diploma (AAIS & AIS) from Ghana Insurance College / Malta Insurance Training Institute with 15years industrial experience. His interest lies in insurance, risk and data analysis. Justice Peprah AGYEI, CPCU, ACII, ACIIG, MPhil, BA (0208498571) Follow and Like "Talk Insurance with Justice" on LinkedIn and also "The Insurance Classroom" on Facebook and YouTube to learn more on insurance.