Hospital Liability Insurance: An untapped market opportunity

By Gideon Sarfo

Ghana’s healthcare landscape is experiencing remarkable expansion. According to a 2024 Ministry of Health report, the country now boasts approximately 10,598 health facilities, with government-owned institutions accounting for about 80% of this total.

The sector comprises over 200 private hospitals, 340 to 385 faith-based facilities under the Christian Health Association of Ghana (CHAG). Despite this impressive growth, the only specialized insurance policy available for local hospitals is Professional Indemnity insurance.

The Current Insurance Landscape

Some local insurers offer Professional Liability Insurance and Medical Malpractice coverage, which primarily address errors, omissions, and negligence by medical practitioners in the course of attending to their clients. While these policies serve an important purpose, they fall short of providing holistic protection for healthcare institutions themselves.

The local insurance market lacks Hospital Liability Insurance, leaving this significant market segment completely underserved. This gap represents both a risk to healthcare providers and a substantial missed opportunity for the insurance industry.

Hospital Liability Coverage

The policy covers financial losses suffered by hospitals, clinics, and health centres when a patient suffers bodily injury or death due to the following:

Administrative Errors: This covers liability resulting from incorrect patient information, misidentifying patient history, delays in diagnosis or patient treatment, and misappropriation of treatment protocols

Premises Liability: This covers liability to patients, invitees, trespassers, and any member of the public who suffers bodily injury or property damage within the hospital premises due to poor safety measures.

Employee Actions: This covers liability to patients, invitees, trespassers, and any member of the public who suffers bodily injury or property damage arising from the actions of hospital employees.

Equipment Failures: This covers liability to patients, invitees, trespassers, and any member of the public who suffers bodily injury or property damage arising from plant, machinery, or equipment failures used within the hospitals. This includes plant, machinery, or equipment used at the theatre and all departments within the hospital.

Data breaches: This covers liability resulting from breaches of data, privacy, and health records of the hospital’s patients. This covers both patients on admission and those discharged.

Wrongful Treatment Decisions: This covers liability resulting from errors, omissions, or negligence of healthcare professionals involved in wrongful treatment, diagnosis, prescription, or surgery leading to bodily injury of a patient. The professional covered under this section must be recognised and their activities sanctioned by the hospital.

Systemic Operational Issues: This covers the liability of the hospital resulting from patient death, loss of physiological function, wrong surgery, wrong patient, wrong body part removed, infant abduction or improper discharge, hospital-acquired infections, and communication failures.

The Business Case for Insurers

With thousands of health facilities operating across Ghana, the potential market is substantial. Consider the private hospital sector alone, with over 200 facilities that operate with significant investments and reputational concerns. These institutions understand risk management and would likely embrace comprehensive liability protection if properly structured products were available.

Faith-based facilities under CHAG similarly recognize their fiduciary responsibilities. With their extensive network of 340 to 385 facilities serving communities nationwide, CHAG institutions would benefit tremendously from liability coverage that protects their missions and assets.

Strategic Steps for Insurance Companies

To harness this opportunity, Ghanaian insurers should take deliberate action to:

Develop Specialized Products: Create comprehensive Hospital Liability policy wordings tailored to Ghana’s healthcare environment, considering local regulations, common risk exposures, and facility categorizations.

Build Technical Capacity: Train underwriters in healthcare risk assessment, claims adjusters in medical liability evaluation, and sales teams in communicating the value proposition to healthcare administrators.

Engage Stakeholders: Collaborate with the Ministry of Health, Ghana Health Service, CHAG, and private hospital associations to understand their specific needs and concerns.

Start with Pilot Programs: Launch initial products targeting specific segments. Insurers can begin with private hospitals or larger faith-based facilities to refine offerings before broader rollout.

Educate the Market: Many healthcare administrators may not fully understand their liability exposures. Insurers should invest in awareness campaigns demonstrating the financial and operational benefits of the coverage.

A Win-Win Proposition

Hospital Liability Insurance represents a rare alignment of interests. Healthcare facilities gain financial protection and operational peace of mind. Patients benefit from knowing that institutions maintain adequate coverage to address potential grievances. Insurers tap into a growing, sustainable revenue stream with the potential for long-term client relationships.

Conclusion

Ghana’s healthcare sector is expanding rapidly, but the insurance products supporting this growth have not kept pace. With over 10,000 health facilities nationwide and no standardized Hospital Liability Insurance available, the market opportunity is clear and substantial.

The question is not whether this gap will eventually be filled, but which insurance companies will have the foresight to act first. Those who develop robust, locally-appropriate Hospital Liability products will not only capture significant market share but also contribute meaningfully to strengthening Ghana’s healthcare system.

Gideon is a Senior Underwriting Analyst with Willis Towers Watson Ghana. He holds Chartered Insurance Risk Manager and Chartered Property and Casualty Underwriter designations.

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