Can my negligence be insured

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Justice Peprah AGYEI                                         

An Accra High court has fined the 37 Military Hospital  GH¢1,075,000 for medical negligence that 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 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 report, the General Jurisdiction Division of the Accra High Court 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 costs of GH¢2,000 against the hospital. (peacefmonline, 2021).

The issue of medical negligence comes within a range of professional transgressions which include negligence

What is the meaning of ‘professional’ and why would a court bring such charges against them? The original meaning of professional is derived from the Middle English profess – an adjective meaning having professed one’s vows, which is 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 to 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 of paying damages to persons who have sustained financial loss arising from their professional negligence, or that of their employees, in conducting 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/misleading 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 can 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 mandated 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 licenced insurer for the professional person.

An employer that contravenes the 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 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 a doctor, the patient must prove that the doctor has been negligent.

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),

+233 (0) 540709031  [email protected]


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Malta International Training Centre, Liability Insurances for Commercial Enterprises, 2021






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