Mortgage Broker Professional Indemnity Insurance

For a sole mortgage broker, PI insurance typically costs between $1,500 and $4,000 per year depending on loan volumes, services provided and claims history. Small to medium brokerages with multiple brokers can expect premiums from $5,000 to $15,000. Larger operations pay proportionally more. Request a free quote through Shielded for an accurate indication.

Yes, provided your policy is up to date and covers civil liability arising from credit assistance activities. The best interests duty, which took effect on 1 January 2021, is a statutory obligation that can give rise to compensation claims. Ensure your policy explicitly addresses this duty - older wordings may not adequately cover it.

It depends on the aggregator arrangement. Some aggregators arrange group PI cover that extends to all brokers under their network. Others require brokers to arrange their own cover. Even if your aggregator provides PI insurance, you should obtain a copy of the policy certificate, understand the limits, excesses and exclusions, and assess whether supplementary cover is needed.

Yes. Most mortgage broker PI policies cover the cost of responding to AFCA complaints and any compensation ordered by AFCA. It is important to notify your insurer as soon as you receive an AFCA complaint to ensure the matter is covered under the current policy.

ASIC does not prescribe a specific minimum limit but requires that cover be adequate for your business. Common limits range from $1 million to $5 million for small to medium brokerages. The appropriate limit depends on your loan volumes, average loan sizes and the types of finance you arrange. Your broker can help assess the right limit for your business.

It can, but not all policies automatically include commercial and asset finance activities. If you arrange commercial loans, equipment finance or asset finance in addition to residential mortgages, ensure your policy specifically covers these activities. Disclose all services when applying for cover to avoid potential coverage issues.

If a borrower alleges that your credit assistance was negligent - for example, recommending a loan they could not afford, failing to explain risks, or breaching the best interests duty - and they suffer financial loss as a result, your PI insurance covers the cost of defending the claim and any damages or compensation awarded, up to the policy limit.

Professional indemnity (PI) insurance protects professionals and businesses against claims arising from negligent acts, errors, omissions or breaches of professional duty in the provision of services or advice. It covers legal defence costs, settlements and damages awarded against you. PI insurance operates on a claims-made basis, meaning the policy in force when the claim is made responds - not the policy in force when the work was performed.

Any professional who provides advice, designs, recommendations or services to clients should carry PI insurance. This includes accountants, architects, engineers, lawyers, financial planners, mortgage brokers, IT consultants, real estate agents, builders, health practitioners, management consultants and many more. For many professions, PI insurance is mandatory under Australian legislation or industry body requirements.

PI insurance premiums depend on your profession, annual revenue or fee income, claims history, limit of indemnity required and the scope of services you provide. A sole practitioner consultant might pay $500 to $2,000 per year for $1M cover, while a mid-size engineering or accounting firm could pay $5,000 to $20,000+ for $5M to $10M cover. High-risk professions like financial planning or building design attract higher premiums.

PI insurance typically covers legal defence costs (solicitors, barristers, court fees), damages or settlements awarded to the claimant, investigation costs from regulatory bodies, breach of professional duty, negligent acts or omissions, unintentional breach of confidentiality, loss or damage to client documents, and defamation arising from professional activities. Cover extends to past work through retroactive dates.

Yes, for many regulated professions in Australia. Mandatory PI insurance requirements apply to solicitors, financial advisers (AFSL holders), mortgage brokers, accountants (registered tax agents), architects, building practitioners in most states, real estate agents, migration agents, customs brokers, and various health practitioners. Requirements vary by state and professional body - check your specific obligations.

Professional indemnity covers financial loss caused by your professional advice or services - for example, an accounting error that costs a client money. Public liability covers physical injury or property damage caused by your business operations - for example, a client tripping over a cable in your office. Most professionals need both, but they cover fundamentally different risks.

PI insurance operates on a 'claims-made' basis, meaning the policy that responds is the one in force when the claim is first made or notified - not the policy that was in force when the work was performed. This is why continuous, unbroken cover is essential. If you change insurers or let your policy lapse, you may lose cover for past work. Run-off cover is available for professionals who retire or close their practice.

The limit of indemnity you need depends on your contractual obligations, regulatory requirements and risk exposure. Many contracts require $1M, $2M, $5M or $10M minimum cover. Regulatory requirements vary by profession - for example, AFSL holders have specific minimums set by ASIC. Consider your largest client contracts and the potential financial impact of a claim when selecting your limit.

Contact us at Shielded Insurance on 1800 97 98 99 or your insurer directly. With PI insurance, early notification is critical - you must notify your insurer of any claim or circumstance that could give rise to a claim as soon as you become aware of it. Late notification can jeopardise your cover. Never admit liability or attempt to settle a claim without insurer approval.

We access a broad range of Australian domestic markets, specialist underwriting agencies and international capacity including Lloyd's of London syndicates. This allows us to place cover for standard professions through to complex or hard-to-place risks. As brokers, we compare multiple options to find competitive and suitable cover for your profession and risk profile.