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Professional indemnity insurance protects you and your business against the costs of claims made by clients who have suffered loss due to your professional advice or work. For insurance brokers, this is particularly important as a single mistake or oversight can result in significant financial liability.
The main risks insurance brokers face include: mis-selling, unsuitable policy recommendations, claims handling errors
Regulatory requirement: FCA requires all practising insurance brokers to hold professional indemnity insurance.
The amount of professional indemnity insurance cover you need depends on the size of your business, the types of clients you work with, and the potential value of claims. Most insurance brokers opt for cover between £500,000 and £2 million.
The right level of cover depends on the size of your projects, your annual revenue, and any contractual requirements from your clients. Leo's comparison tool can help you explore different cover levels and see how they affect your premium.
The cost of professional indemnity insurance for insurance brokers varies depending on:
As a guide, insurance brokers typically pay from £22 per month for professional indemnity insurance.
Compare PI insurance in 60 secondsYou fail to arrange adequate insurance cover or recommend inappropriate policy limits, leaving your client underinsured when a loss occurs.
You fail to disclose material information about your client to insurers, resulting in voidance of the policy when a claim is made.
You miss critical renewal deadlines or fail to update your client's cover as their business circumstances change, leaving them uninsured.
You fail to arrange required statutory insurance (employer's liability, public liability) or miss compliance deadlines.
Professional indemnity insurance for Insurance Broker typically covers:
FCA-regulated insurance brokers must hold professional indemnity insurance meeting specific FCA requirements. Cover typically ranges from £250K-£1M depending on premium volume and client types. Your policy must comply with FCA minimum requirements and cover all insurance classes you advise on. Ensure your policy covers breach of FCA/ICOBS requirements, claims management, and renewal administration. Brokers handling corporate accounts with large premiums or complex cover requirements should consider enhanced cover.
Approximately 15% of insurance brokers have faced a professional indemnity claim. The average claim is valued at £58,000. Failure to arrange adequate cover accounts for 38% of claims, whilst renewal and deadline misses represent 32% of claims. Non-disclosure issues account for 22% of claims.