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 Insurance is very important for every person
during their life even though majority of people do not care about the
importance of having insurance. In the day to day life not only people are
faced with risks around their businesses, lives, or activities but their
professions as well. Insurance provides a sense of security to the (person
taking it up) insured. 

Private health facilities are no different they face a number
of risks and the often overlooked risk is reputationML1 . In cases where liablities arise, there is a tendancy for
the professional invovled to sette the case as quickly as possible. This may be
the easiest solution, but its also important to look at the effects it has on
the reputation.

indemnity insurance ML2 ploices
provied protection for you and your businesses aglleged negligence or breach of
duty arising from an act, error or omission in the performance of professional
servicesML3 . It enables one to pursue leagal avenues to clear ones name
and reputation with the backing of legal and insurance team. This cover offers
a peace of mind, securty and most of all protects ones reuptationML4 .

This chapter proviedsML5  an overiew of ;  the
background of the study, statement of the problem, significance of the study,
scop of the study and the definition of the key terms.



insurance is the oldest branch of modern insurance, originating with the Lombart
merchants in 13th century Italy, from there it spread to the
continent and then to England. The British dominated maritime trade and also
marine insurance throughout the 1800s and well into the 1900s. ( 

The history of professional negligence is intimately contected with the development
of the tort of negligence and the law of contract. ML7 Professional
indemnity, began in 1885 in England, when the Medical Defence Union (MDU),
which was the worlds first Medical Defence Organisation (MDO), was formed in
response to medical communitys outrage over the case of Dr Daived Bradley. He
had been wrongly sentenced to two years of hard labour in 1884 for sexually
assaulting a woman who sufferd erotic delusions during and after epileptic
seizures. Dr Bradley served eight months in perison before he was eventually
granted a pardon. The case raised awereness among medical practitioners the on
the risk involved in medical practice and the need to pool resources together in
order to defend doctors reputation and livelihood against a rising tide of
patient-initiated medical litigation.ML8 

The first case that accelerated the medical indemnity by
storm was an obstetrics one in Australia. In November 2001, after a nine-year
legal battle, the New South Wales (NSW) Supreme Court awarded Calandre Simpson,
then 22, $14 million (reduced on appeal to $11 million). Ms Simpson was born in
1979 with severe athetoid cerebral palsy, and as a result became severely
disabled. Her mother was given Syntocinon as part of labour induction, and five
attempts at forceps delivery were made before she was finally delivered by
caesarean section. The court ruled that her brain injury was caused by
negligence by the obstetrician Dr Robert Diamond during the delivery.

Clearly, claims of professional negligence can result not
only in the destruction of a company or 
organisation , but may ultimately cause an irrevocable break in public
trust, personal litigation and prison time for those entrusted with the task of
handling our health.

at the rapid growth of the insurance industry, the same cannot be said about
professional indemnity policies covered under Liability insurance.  



indemnity insurance is one of the policies that is sold by General insurance
companies on the Zambian insurance market.

A good state of health is the most important
consideration of a human being and health professional’s play a critical role
in providing essential services, promote health, prevent diseases and deliver
health care services to individuals, families and communities. This being said
there is however an element of risk that is faced by medical practitioners such
as medical malpractice, errors or negligence and defense costs arising thereof.
Thus insurance companies have in place a policy to cover for such risks. However,
the uptake of professional indemnity insurance in Zambia

 by private
health facilities is quite low even with a number of insurance companies
selling this insurance policy.




v  To
determine factors affecting the uptake of professional indemnity insurance
policies by private health facilities.


1.     To
determine the level of understanding of professional indemnity insurance by
private health facilities in Zambia.

2.     To
establish how professional indemnity insurance is conducted by insurance

3.     To
establish the awareness of the significance of professional indemnity insurance
by private health facilities in Zambia.

4.     To
establish the key factors influencing the low uptake of professional indemnity
insurance by private health facilities in Zambia.



1.      What
is the level of understanding of professional indemnity insurance by private
health facilities?

2.       How do insurance companies conduct
professional indemnity insurance policies?

Do medical
practitioners and management understand the significance of professional

4.      What
are the key factors influencing the low uptake of professional indemnity
insurance by private health facilities?



 1.6 Significance of study


To the health facilities
that did not know or knew little about professional indemnity insurance got to
know what it was all about and some of the benefits that the policy offers. Whith public awarness, claims and litigation have increased
and are still increasing at an unprecedented rate. It was important for health
facilities to be aware of the policies that are in place that they can use to
defend and protect medical practitioners in the event of any rise to such

knowledge generated will provide insurance business leaders with information
that may be valuable in motivating the private health facilities to purchase the
professional indemnity insurance policy. The study may also help to raise
awareness of Health Facilities in Zambia with the adoption of insurance. This study will also
contribute to the already existing literature on Professional indemnity
insurance which can be used by future researchers on the subject.






This study was
limited to Lusaka health facilities due to the limitation in resources such as time
and money. Lusaka, was selected by the researcher because it is the researcher’s
home so this cut down on costs of transport to and from the point of data




ü Policy: it is an insurance
contract which is a formal document issued by an insurance company to an
insured. It puts an indemnity cover into effect, serves as the legal evidence
of the insurance

Professional: is a person who earns a
living from a specified activity

Indemnity: is a principal of insurance
which provides that when a loss occurs, the insured should be restored to the
same financial condition occupied before the loss occurred.

Insurance: equitable transfer of risk
of a potential loss from one entity to another in exchange of premium and duty
of care (Tsoukatos and Rand, 2006).

Liability: is the condition of being
liable, an obligation or responsibility owed to someone.

facility: medical building, such as hospital, clinic.

ü Medical practitioner: medical man, health
professional or health care provider.

Negligence: the breach of duty of care.

Error: a mistake, an accidental
wrong action or false statement not made deliberately.

Malpractice: improper treatment of a
patient by a physician that results in injury or loss.











Literature review refers to text of scholarly papers, research reports
and other documents, which contain current knowledge, including substantive
findings, as well as theoretical and methodological contributions to a
particular theme. 

This chapter provided an overview of
research studies, technical papers, theoretical frameworks and other works done
on the subject of home owners insurance. The chapter highlighted research
methodology, findings and recommendations arising from other researchers.



A study was done by Banda Ansberto
Ngoyi (2009) entitled “An Analysis of the Effect of an Insured Persons Criminality
upon Claim in Indemnity Insurance Contracts in Zambia”. Is aimed at analyzing
some principals of insurance law vis a vis indemnity contracts. One of the
common law principals stated in the Latin phrase ‘er turip causa non actio’.But
questions arise to whether there is a consistent effect of persons criminal
acts upon a claim in an insurance contract of indemnity. Some scholars have
noted that even persons who are found guilty of some criminal acts under some statues
many succeed in a claim for indemnity under insurance law. One good example is
when an insured person takes a policy for indemnity of a third party, even if
the insured commits a crime negligently under the Road Traffic Act. In ordinary
parlance, it is difficult to appreciate why at times, criminal acts are put
into contemplation when considering a claim under an indemnity insurance
contract while in other instances, a claim may be given without such


2.2 OTHER STUDIES       


In the Liability briefing in
London (August 2008), professional indemnity insurance (PII)
policies (which are annually renewable) are written on a claims made basis,
in contrast to many other types of insurance. This means that the insurers who
pay the claim are those providing cover when the claim, or circumstances which
might give rise to a claim, is first notified to insurers, rather than when the
work was undertaken or the mistake made. The significance of this can be seen:
the cover might be wider when a contract is entered into than when a claim is
made. For example, some insurers are now excluding cover for personal injury
claims in relation to asbestos, whereas they offered such cover in the past.


policies are always subject to a limit of indemnity that is a maximum amount
that insurers will pay in respect of damages, interest and legal costs payable
to the claimant. The limit can be each and every claim (sometimes
expressed as any one claim or any one occurrence or series of
occurrences arising out of one event) or in the aggregate. Each and
every claim cover means that the limit is payable in respect of each claim.
Aggregate cover means that the limit is only available once, however many
claims are made, in the policy period. Generally, cover is for each and every
claim, but certain types of claim may be limited to aggregate cover (eg
pollution and contamination or asbestos). (Each and every claim cover may not
be as generous as it sounds: if say the same defect, caused by a single
negligent act, is found in four warehouses or 200 dwellings, all the claims
brought against you in respect of the defects could constitute a single claim
under your insurance policy.)

Dr Milton Lum (2005) states
that when there is a medico-legal claim or complaint, the doctor will require
the professional services of a lawyer.

In the event that a claim is
successful, the unsuccessful defendant doctor will usually be ordered by the
court to pay damages to the plaintiff. The damages awarded are generally no
different from that in other types of personal injury cases, and would also
include an interest element which is usually calculated from the commencement
of the case.The court will usually order the doctor to pay the costs for the
plaintiff’s lawyer. The court may also order the doctor to pay for the costs of
the lawyer(s) for co-defendant(s) e.g. other doctor(s), hospital etc. In
addition, the doctor will also have to pay his or her own lawyer. It is not
uncommon for costs to exceed the damages awarded.

Medical indemnity coverage
is provided by the Government in Ministry of Health healthcare facilities and
University hospitals. However, the interests of doctors and the Government may
not always converge.

Doctors in the private
sector purchase their own medical indemnity coverage. Claims based indemnity is
provided by insurance companies which provide coverage as long as the policy is
in force i.e. the insured continues to pay premiums for the initial policy and
subsequent renewals.



Different studies have been done on indemnity,
liability and professional indemnity insurance. According to the literature
reviewed in this chapter it showed that no study had been done on the low
uptake of professional indemnity insurance and there is no document that had
been done regarding to the low uptake of professional indemnity in Zambia.  



are a number of theories that explain decision making in relation to taking up
insurance by health facilities in Zambia;

2.4.1 Consumer
Behaviour Theory; states how individuals
make choices depending on their income and the prices of goods and services.
The consumer theory is concerned with how a rational consumer would make
consumption decisions. It states that the consumer’s choice sets, meaning; the
choice of which goods and services the consumer is more likely to buy is highly
influenced by the prices and the consumer’s income or wealth. (Begg, 2000)


2.4.2 Consumer
Perception Theory; states that Consumer
perception attempts to explain consumer behaviour by analyzing motivations for
buying. Three areas of consumer perception theory relate to; self-perception,
price perception, and perception of a benefit to quality of life. Consumer
perception applies the concept of sensory perception to marketing and
advertising. It pertains to how individuals form opinions about companies and
the goods or services they offer through the purchases they make. This is use
full for insurers to determine how their customers perceive them.


2.4.3 Continuous
Trigger Theory; stats that policies are triggered
if they are in effect during any of the following times: exposure to harmful
conditions; actual injury or damage; and upon manifestation of the injury or
damage. (Craig F. Stanovich Austin & Stanovich Risk Managers, LLC 2009).


2.4.4 Manifestation
Theory; states that a policy is triggered when
the injury or damage is discovered or manifests itself (or in some cases is
capable of being discovered) during the policy period. That the injury or
damage may be been occurring prior to discovery may not be taken into account
in this theory. (Craig F. Stanovich Austin & Stanovich Risk Managers, LLC









































Source: Author                                                                                                  

The theoretical framework above shows that the factors affecting the
uptake of professional indemnity insurance can be divided into internal and
external factors. The internal factors include; poor advertisement and
promotion strategies, poor service delivery and pricing of the policy. On the
other hand we have the external factors which include; poor understanding of
professional indemnity insurance, the policy benefits and the disposable income
of health facilities. These factors can be improved by implementing strategies
such as; increased sensitisation, coming up with attractive advertisements and
promotions as well as improved claims settlement.



























Research methodology is the process
used to collect data for the purpose of collecting information for decision
making. It involves the systematic and theoretical analysis of the methods
applied to the field of study.  This chapter provides an overview of the
study approach, research
methodology, including the research design, population sample targeting, sample
size, sampling procedures, data collection techniques and data analysis methods.


study adopted a descriptive research design in order to understand
the factors behind the low uptake of insurance policies in Zambia. This
research was qualitative in nature. This is because the research used
descriptions, uncovered the way people feel and the reasons for not taking up professional
indemnity insurance. The research used a descriptive research design because it will
describe the characteristics of the population being studied.



A sample is “a smaller (but
hopefully representative) collection of units from a population used to
determine truths about that population” (Field, 2005). The research comprised 148 private health facilities in Lusaka
according to the 2012 List of Health Facilities in Zambia Preliminary Report Version No. 15 (April 2013) and 34 insurance
companies (Authority, 2016). The research population comprised of
private hospitals and clinics. The respondents targeted in the group where members
of the administration in the health facilities.



sample size for the study was 5 health facilities and 2 insurance companies.
This is so because it was a descriptive study.




The type of sampling used in this
research was simple random sampling. This is the least sophisticated of all
sampling and a sample is chosen by simple random selection where by every
member of the population has an equal chance of being selected. In probability sampling, each segment
of the population has a likelihood of being part of the sample size. The
general process is that of random Selection-meaning choosing a sample in such a
way that each member has an equal chance of being selected.





Data was collected through
interviews using the unstructured questionnaires as a guide in order to get
more information as compared to structured questionnaire. The other data was
collected through desktop review of available literature.


The questionnaire that was used for this study was thoroughly
scrutinized by the supervisor to ensure its clarity, relevance, un-ambiguity
and comprehension.


The research data was analysed, interpreted and
presented according to the research questions. The researcher used Microsoft
Excel to analyse and interpret the collected data.


Ethical Consideration


When undertaking this research, the following codes of
ethics were applied;

Informed Consent: The respondents were informed of the nature of study to be conducted and
be given the choice of ether participating or not. They were also informed that
should they want to change their minds later, they were free to withdraw at any
time. Thus any participation in this research study was strictly voluntary and
did not receive any sort of remuneration for participation.

Principle of Anonymity and confidentially: The participants’ identity was not disclosed. The
respondent’s name or personal details were not collected. The data collection
tools such as a questionnaire did not contain traceable details of the
respondents such as names and physical address.

Honesty with professional Colleagues: The researcher reported the findings in a complex and
honest fashion without   misrepresenting
what they collected or the nature of their findings.

Value-neutrality: The researchers did not impose their values on others or alter the respondent’s
behavior, and they guarded against letting their values influence
interpretation of their findings.

Data was collected between 9 hours and 17 hours to
avoid inconveniences.


























The objective of the study was to explore the factors
contributing to the low uptake of professional indemnity by private health
facilities in Zambia.

This chapter presents an overview of the data presentation, data analysis
and discussion of findings of the research. The purpose of this study was to
find out the factors negatively affecting the uptake of professional indemnity
insurance by health facilities. This chapter will present data analysis which
tested primary data to establishing the views and the causes of the low uptake
from the health facilities.

4.1 know about professional
indemnity insurance

The findings of the study showed that some of the respondents did not know
about professional indemnity insurance, more especially the small health facilities.
The researcher explained what professional indemnity insurance was to the
respondents who did not know what it was all about and what the policy covered.

4.2 taking it up any time
in the future

The findings of the study showed that after conducting the respondents go
to understand what professional indemnity is all about and what it covers for,
respondents were asked if they were going to take up the policy now that they
understood it better. Most of them said yes. This is because the private
medical counsel only protects the private medical practitioners professionally
but does not provide lawyers for them in cases where medical malpractices,
errors or negligence occurs. In cases where the health facility is sued by the
patient and the court rule in favour of the patient then the health facility
will have to pay damages caused to the patient and these awards are in huge
amounts. Which becomes a challenge for the health facility to raise the funds
to pay the legal expenses.



4.3 face medical claims on a scale of 1-10

The findings of the study showed most of the respondents responded with a
NO to this question. Stating that they have not had any medical claims since
there practice began.

4.5 protect your medical
practitioners against such claims

The findings of the study showed that some of the health facilities put in
place guidelines on how things should be done and in what order they should be
done. This is a way that they provide protection for their medical practitioners
and a way they have set in order to avoid any medical malpractice, errors, or
negligence that will lead to claims in the future. No other alternatives have
been set for any future events that will result into liabilities for the health

4.6 reason to why health
facilities in Zambia don’t take up this policy

The findings of the study showed that there has been poor advertisement and
promotion strategies towards the professional indemnity police by the insurance
companies. Most of the health facilities didn’t know about it or didn’t
understand it. Unlike other insurance policies on the market most of them have
been advertised well and have good promotional strategies in place which makes
them attractive to the targeted consumers out there on the market.      





 ML1Explain further. What is reputational risk?

 ML2First letters should be capital. I will state as FLC in the document
going forward.

 ML3Reference? This is not your definition so where is this from?

 ML4Perhaps explain a little as to why reputation is important. Why should
this be covered by insurance in the first place?


 ML6I think you can reference this better. See the rules for Harvard referencing.




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