Failure to comply with Ghana’s insurance laws on Professional Indemnity (PI) insurance exposes businesses to severe financial losses, often leading to their collapse.
Despite efforts by Ghana’s National Insurance Commission (NIC) to raise awareness, many professionals and businesses still ignore this mandatory requirement, leaving themselves vulnerable to costly liabilities.
The Financial Toll of Professional Negligence
Professional negligence has caused significant financial and structural damage across industries in Ghana. Market fires, collapsed buildings, botched surgeries, and accounting errors are examples of incidents that result in devastating losses.
Market fires
Ghana has experienced a series of devastating market fires, leading to significant financial losses and impacting thousands of livelihoods. One of the most notable incidents occurred on January 2, 2025, when a massive fire engulfed the Kantamanto Market in Accra, one of the world’s largest secondhand clothing hubs.
This catastrophe destroyed approximately two-thirds of the market, affecting around 8,000 traders and resulting in economic losses estimated in the tens of millions of cedis. These recurrent market fires not only devastate individual businesses but also disrupt local economies and supply chains. The financial impact extends beyond the immediate loss of goods and infrastructure; it affects the broader community that relies on these markets for employment and commerce.
Collapsed buildings
A six-storey building housing a Melcom shopping center collapsed at Achimota, resulting in 14 deaths and 61 injuries. Studies have identified common causes of building collapses in Ghana, including the use of unqualified contractors, construction defects, non-adherence to building codes, and poor maintenance practices. These factors not only endanger lives but also result in substantial economic setbacks.
Head of Marketing and External Relations at the NIC, Charles Ansong Dankyi, explains that cases of professional negligence happen daily, yet the professionals responsible often walk free because there is no system in place to hold them financially accountable.
“Doctors perform surgeries, and when mistakes happen, patients suffer long-term health challenges or even die, leading to lawsuits against the doctors. In the construction sector, buildings collapse due to poor designs, yet professionals who approved these designs go unpunished,” Mr. Dankyi noted.
Without Professional Indemnity Insurance, businesses that rely on these professionals bear the financial burden when things go wrong. This lack of protection has resulted in businesses shutting down due to liabilities they cannot afford.
The Hidden Costs: When Businesses Fail to Demand PI Insurance
When businesses fail to ensure that their service providers have Professional Indemnity Insurance, they unknowingly absorb the financial risks associated with negligence and errors. Some of the consequences include:
- Legal Expenses and Compensation Claims – Without PI coverage, businesses have to pay huge legal fees and compensation costs when lawsuits arise.
- Project Delays and Revenue Losses – Construction errors or legal battles can stall projects, leading to delays and lost income.
- Loss of Reputation and Customer Trust – When negligence leads to publicized failures, businesses lose credibility, making it harder to secure future contracts.
- Closure of Business – For SMEs, a single lawsuit resulting from professional negligence can wipe out their entire capital, leading to permanent closure.
The NIC’s Mr Ansing explains further that Professional Indemnity Insurance provides a financial safety net by covering legal defense costs in the event of a negligence claim, compensation to affected parties, ensuring businesses don’t bear the full cost and continuity of operations, as insurance indemnifies businesses, allowing them to recover quickly.
“PI Insurance ensures that even when mistakes happen, the business does not collapse. Instead, the insurer absorbs the financial loss and indemnifies the business. For example, if a business takes a GH₵10 million PI insurance cover, paying a 0.6% premium (about GH₵65,000 annually), it secures protection from multimillion-cedi claims. Without insurance, businesses would have to shoulder such costs alone, a risk many cannot afford,” he explained.
Why Insist on PI Insurance?
The Insurance Act 2021 (Act 1061) mandates that professionals offering critical services—such as engineers, doctors, auditors, accountants, contractors, architects, and consultants—must have Professional Indemnity Insurance. Businesses hiring such professionals must insist on proof of coverage before engaging them.
By making PI insurance a prerequisite for service contracts, businesses, shield themselves from financial ruin, ensure project continuity, even in the face of professional errors and promote accountability among service providers.
Mr Ansong notes that with the increasing incidents of fire outbreaks, building collapses, and professional errors, Ghanaian businesses can no longer afford to ignore Professional Indemnity Insurance.
“It is time for businesses to take action—demand PI insurance from all professionals they engage. Failing to do so could mean the difference between survival and bankruptcy when disaster strikes,” he concluded. Failure to comply with Ghana’s insurance laws on Professional Indemnity (PI) insurance exposes businesses to severe financial losses, often leading to their collapse. Despite efforts by Ghana’s National Insurance Commission (NIC) to raise awareness, many professionals and businesses still ignore this mandatory requirement, leaving themselves vulnerable to costly liabilities.
The Financial Toll of Professional Negligence
Professional negligence has caused significant financial and structural damage across industries in Ghana. Market fires, collapsed buildings, botched surgeries, and accounting errors are examples of incidents that result in devastating losses.
Market fires
Ghana has experienced a series of devastating market fires, leading to significant financial losses and impacting thousands of livelihoods. One of the most notable incidents occurred on January 2, 2025, when a massive fire engulfed the Kantamanto Market in Accra, one of the world’s largest secondhand clothing hubs. This catastrophe destroyed approximately two-thirds of the market, affecting around 8,000 traders and resulting in economic losses estimated in the tens of millions of cedis. These recurrent market fires not only devastate individual businesses but also disrupt local economies and supply chains. The financial impact extends beyond the immediate loss of goods and infrastructure; it affects the broader community that relies on these markets for employment and commerce.
Collaped buildings
A six-storey building housing a Melcom shopping center collapsed at Achimota, resulting in 14 deaths and 61 injuries. Studies have identified common causes of building collapses in Ghana, including the use of unqualified contractors, construction defects, non-adherence to building codes, and poor maintenance practices. These factors not only endanger lives but also result in substantial economic setbacks.
Head of Marketing and External Relations at the NIC, Charles Ansong Dankyi, explains that cases of professional negligence happen daily, yet the professionals responsible often walk free because there is no system in place to hold them financially accountable.
“Doctors perform surgeries, and when mistakes happen, patients suffer long-term health challenges or even die, leading to lawsuits against the doctors. In the construction sector, buildings collapse due to poor designs, yet professionals who approved these designs go unpunished,” Mr. Dankyi noted.
Without Professional Indemnity Insurance, businesses that rely on these professionals bear the financial burden when things go wrong. This lack of protection has resulted in businesses shutting down due to liabilities they cannot afford.
The Hidden Costs: When Businesses Fail to Demand PI Insurance
When businesses fail to ensure that their service providers have Professional Indemnity Insurance, they unknowingly absorb the financial risks associated with negligence and errors. Some of the consequences include:
- Legal Expenses and Compensation Claims – Without PI coverage, businesses have to pay huge legal fees and compensation costs when lawsuits arise.
- Project Delays and Revenue Losses – Construction errors or legal battles can stall projects, leading to delays and lost income.
- Loss of Reputation and Customer Trust – When negligence leads to publicized failures, businesses lose credibility, making it harder to secure future contracts.
- Closure of Business – For SMEs, a single lawsuit resulting from professional negligence can wipe out their entire capital, leading to permanent closure.
The NIC’s Mr Ansing exolains further that Professional Indemnity Insurance provides a financial safety net by covering legaldefensecosts in the event of a negligence claim, compensation to affectedparties, ensuring businesses don’t bear the full cost and continuity of operations, as insurance indemnifies businesses, allowing them to recover quickly.
“PI Insurance ensures that even when mistakes happen, the business does not collapse. Instead, the insurer absorbs the financial loss and indemnifies the business. For example, if a business takes a GH₵10 million PI insurance cover, paying a 0.6% premium (about GH₵65,000 annually), it secures protection from multimillion-cedi claims. Without insurance, businesses would have to shoulder such costs alone, a risk many cannot afford,” he explained.
Why Insist on PI Insurance?
The Insurance Act 2021 (Act 1061) mandates that professionals offering critical services—such as engineers, doctors, auditors, accountants, contractors, architects, and consultants—must have Professional Indemnity Insurance. Businesses hiring such professionals must insist on proof of coverage before engaging them.
By making PI insurance a prerequisite for service contracts, businesses, shield themselves from financial ruin, ensure project continuity, even in the face of professional errors and promote accountability among service providers.
Mr Ansong notes that with the increasing incidents of fire outbreaks, building collapses, and professional errors, Ghanaian businesses can no longer afford to ignore Professional Indemnity Insurance.
“It is time for businesses to take action—demand PI insurance from all professionals they engage. Failing to do so could mean the difference between survival and bankruptcy when disaster strikes,” he concluded.
Failure to comply with Ghana’s insurance laws on Professional Indemnity (PI) insurance exposes businesses to severe financial losses, often leading to their collapse. Despite efforts by Ghana’s National Insurance Commission (NIC) to raise awareness, many professionals and businesses still ignore this mandatory requirement, leaving themselves vulnerable to costly liabilities.
The Financial Toll of Professional Negligence
Professional negligence has caused significant financial and structural damage across industries in Ghana. Market fires, collapsed buildings, botched surgeries, and accounting errors are examples of incidents that result in devastating losses.
Market fires
Ghana has experienced a series of devastating market fires, leading to significant financial losses and impacting thousands of livelihoods. One of the most notable incidents occurred on January 2, 2025, when a massive fire engulfed the Kantamanto Market in Accra, one of the world’s largest secondhand clothing hubs. This catastrophe destroyed approximately two-thirds of the market, affecting around 8,000 traders and resulting in economic losses estimated in the tens of millions of cedis. These recurrent market fires not only devastate individual businesses but also disrupt local economies and supply chains. The financial impact extends beyond the immediate loss of goods and infrastructure; it affects the broader community that relies on these markets for employment and commerce.
Collaped buildings
A six-storey building housing a Melcom shopping center collapsed at Achimota, resulting in 14 deaths and 61 injuries. Studies have identified common causes of building collapses in Ghana, including the use of unqualified contractors, construction defects, non-adherence to building codes, and poor maintenance practices. These factors not only endanger lives but also result in substantial economic setbacks.
Head of Marketing and External Relations at the NIC, Charles Ansong Dankyi, explains that cases of professional negligence happen daily, yet the professionals responsible often walk free because there is no system in place to hold them financially accountable.
“Doctors perform surgeries, and when mistakes happen, patients suffer long-term health challenges or even die, leading to lawsuits against the doctors. In the construction sector, buildings collapse due to poor designs, yet professionals who approved these designs go unpunished,” Mr. Dankyi noted.
Without Professional Indemnity Insurance, businesses that rely on these professionals bear the financial burden when things go wrong. This lack of protection has resulted in businesses shutting down due to liabilities they cannot afford.
The Hidden Costs: When Businesses Fail to Demand PI Insurance
When businesses fail to ensure that their service providers have Professional Indemnity Insurance, they unknowingly absorb the financial risks associated with negligence and errors. Some of the consequences include:
- Legal Expenses and Compensation Claims – Without PI coverage, businesses have to pay huge legal fees and compensation costs when lawsuits arise.
- Project Delays and Revenue Losses – Construction errors or legal battles can stall projects, leading to delays and lost income.
- Loss of Reputation and Customer Trust – When negligence leads to publicized failures, businesses lose credibility, making it harder to secure future contracts.
- Closure of Business – For SMEs, a single lawsuit resulting from professional negligence can wipe out their entire capital, leading to permanent closure.
The NIC’s Mr Ansong explains further that Professional Indemnity Insurance provides a financial safety net by covering legal defense costs in the event of a negligence claim, compensation to affected parties, ensuring businesses don’t bear the full cost and continuity of operations, as insurance indemnifies businesses, allowing them to recover quickly.
“PI Insurance ensures that even when mistakes happen, the business does not collapse. Instead, the insurer absorbs the financial loss and indemnifies the business. For example, if a business takes a GH₵10 million PI insurance cover, paying a 0.6% premium (about GH₵65,000 annually), it secures protection from multimillion-cedi claims. Without insurance, businesses would have to shoulder such costs alone, a risk many cannot afford,” he explained.
Why Insist on PI Insurance?
The Insurance Act 2021 (Act 1061) mandates that professionals offering critical services—such as engineers, doctors, auditors, accountants, contractors, architects, and consultants—must have Professional Indemnity Insurance. Businesses hiring such professionals must insist on proof of coverage before engaging them.
By making PI insurance a prerequisite for service contracts, businesses, shield themselves from financial ruin, ensure project continuity, even in the face of professional errors, and promote accountability among service providers.
Mr Ansong notes that with the increasing incidents of fire outbreaks, building collapses, and professional errors, Ghanaian businesses can no longer afford to ignore Professional Indemnity Insurance.
“It is time for businesses to take action—demand PI insurance from all professionals they engage. Failing to do so could mean the difference between survival and bankruptcy when disaster strikes,” he concluded.
