Adoption of professional indemnity insurance among estate surveying and valuation firms in Oyo State, Nigeria

Abstract

PurposeErrors or negligence are inherent parts of professional services, thus necessitating the adoption of professional indemnity insurance (PII) as a risk management tool to protect professional interest. This paper sought to examine the adoption of PII among Estate Surveying and Valuation firms in Oyo State, Nigeria.Design/methodology/approachThe quantitative research methodology was adopted, and primary data were collected via questionnaires distributed to 84 purposively selected Estate Surveyors and Valuers (ESVs) who are mostly principal partners or branch managers in the study area. Sixty-three questionnaires representing 75.0% were returned and found useable. Data collected were analysed with the aid of descriptive statistics of percentages and relative importance index (RII).FindingsThe study found that the influence of foreign investors as well as the requirements of PII by the professional body as a basis for annual license renewal were responsible for higher level of awareness among the practitioners. However, about average of the firms had adopted PII with few taking professional insurance policy of as low as ₦500,000 per annum. The study recommends that NIESV/ESVARBON should sensitize, monitor and enforce the adoption of PII by ESVs as a means to increase public confidence and credibility of valuers while rendering professional services to clients.Research limitations/implicationsThe current study was limited in coverage to Ibadan thus necessitating a study with wider area of coverage of national status.Practical implicationsThe study has major implications on real estate education and practice in Nigeria. There is an urgent need for the professional body to devise means of enforcing compliance with the adoption of PII so as to be able to get the confidence of their teeming clients for subsequent patronage.Originality/valueThe paper is one among the scanty studies that provides a useful guide to real estate practitioners in developing countries towards adopting PII to shield the company from unnecessary negative exposure and financial loss.