What is Professional Indemnity (PI) Insurance and who it is designed for?

Professional Indemnity (PI) insurance is a type of liability insurance that protects professionals and their businesses against claims of financial loss from a client or third party.

In simple terms, it covers you if a client claims they suffered a financial loss because of a mistake, error, or omission in the professional advice or service you provided.

This insurance typically covers:

• Legal & Defence Costs: The high cost of hiring a lawyer to defend you, even if the claim is baseless.
• Compensation & Damages: The amount you are legally required to pay to the client to compensate for their financial loss.
• Negligence: Claims arising from professional negligence or a breach of your duty of care.
• Errors & Omissions: Unintentional mistakes or things you failed to do (omissions) that led to a client's loss.

Simple Example: An accountant makes a calculation error on a client's tax return. The client is fined by the Ghana Revenue Authority (GRA) as a result. The accountant's Professional Indemnity insurance would cover the cost of the client's financial loss (the fine) and any legal fees involved.

2. Who is Professional Indemnity Insurance Meant For?

This insurance is for any individual or business that provides professional advice or services in exchange for a fee.

In Ghana, the need for this policy is even more specific. The Insurance Act, 2021 (Act 1061) has made Professional Indemnity insurance compulsory (mandatory) for certain professions.

This policy is meant for:

A. Professionals Required by Law in Ghana

The Insurance Act, 2021, mandates this cover for a range of professionals to protect the public. This includes:

• Medical Professionals: Doctors, surgeons, dentists, and pharmacists who could face claims of misdiagnosis or incorrect treatment.
• Legal Professionals: Lawyers and law firms, protecting against claims of bad legal advice or errors in handling a case.
• Financial Professionals: Accountants, auditors, and financial advisors who manage client finances.
• Construction & Real Estate: Architects, engineers, and quantity surveyors, whose designs or calculations could lead to costly structural failures.
• Insurance Professionals: Insurance brokers and adjusters are required to have it to protect their clients.
• Insolvency Practitioners: Professionals who manage the affairs of bankrupt companies.

B. Other Professionals Who Should Have It

Even if not (yet) strictly mandatory by law, any professional providing expertise should have PI insurance. This includes:

• IT Consultants (for software errors or data breaches)
• Management Consultants (for bad business advice)
• Marketing & Advertising Agencies (for copyright infringement or failed campaigns)
• Recruitment Agencies (for improper vetting of a candidate)

In short, if your clients can lose money because you made a professional mistake, you need Professional Indemnity insurance.

Protect Your Growth. Secure Your Future.

Risk is complex, but your insurance doesn't have to be. The expert team at InsureGhana Partners specializes in comprehensive risk assessments for Ghanaian businesses.

Contact us today for a free, no-obligation consultation. Let our experts analyze your unique risks and design the precise, cost-effective insurance portfolio your business needs to grow fearlessly.