Factors Influencing Professional Indemnity Insurance Use in Construction Risk Management

Abstract

Despite convergence shown by different schools of thought on the correlation between efficient risk management practices and enhanced delivery of sustainable construction projects, the knowledge gap on the use of professional indemnity insurance (PII) is still persistent in Africa, particularly in Zambia. This paper examined factors influencing the use of PII to manage construction risks. It has identified the main factors influencing the use of PII, assessed their influence and respondents’ consensus level in the Zambia context. Data were collected qualitatively using a two-round Delphi survey. Ten field experts were selected, including construction professionals, contractors and surety providers. Experts’ opinion positioned premium and legal framework as highly influential with a median of within the range of 9 to 10; surety prequalification and stakeholders’ interest as being influential with a median equal to 7. Except for surety prequalification and stakeholders’ interest, which had weak consensus with an Interquartile Range greater than or equal to 2.75, the other six factors (surety service quality, surety, construction firm relationships, competition in the industry, and construction firm level of awareness) reached a good consensus with an Interquartile Range within the range of 1 to 2.75. Embedded with the ability to influence other factors, legal framework acts as focal point to improve access of PII and therefore needs adequate and contextualized amendments.

Keywords

• professional indemnity insurance
• risk management
• design build
• bim
• design error/omission