Mortgage Brokers Insurance
Protect your mortgage brokerage from unsuitable advice claims, regulatory complaints and data breaches with specialist cover.
Get in touchWhat is mortgage brokers insurance?
Mortgage Brokers insurance is a specialist policy designed to protect finance and property professionals from the risks of advising clients, managing transactions and handling sensitive financial data. It typically includes professional indemnity, public liability and cyber liability.
Working in finance and property involves significant professional liability. Incorrect valuations, compliance failures and advisory errors can lead to substantial claims from clients, lenders and regulators.
Find cover options from specialist insurers who specialise in covering finance and property businesses, so your cover reflects the specific risks and regulatory requirements of your profession.
Professional Indemnity
Covers claims arising from unsuitable mortgage recommendations or processing errors.
Public Liability
Covers injury or property damage claims from clients visiting your office.
Cyber Liability
Covers data breaches involving client financial and personal information.
Employers Liability
Required by law if you employ anyone, covering employee injury or illness claims.
Who needs mortgage brokers insurance?
Independent mortgage brokers
Advising on mortgages from the whole market
Tied mortgage advisers
Advising on products from a limited panel
Commercial mortgage brokers
Arranging mortgages for business and investment properties
Buy-to-let mortgage specialists
Advising landlords on buy-to-let mortgage products
FCA regulation and professional indemnity insurance for mortgage brokers
Mortgage brokers must be authorised by the FCA (Financial Conduct Authority) to advise on and arrange mortgages. FCA authorisation is a legal requirement and includes mandatory professional indemnity insurance cover. The FCA requires all authorised firms to hold insurance with minimum cover of at least 60% of annual turnover, subject to a floor of £2 million for larger firms. This is not optional — it is a condition of FCA authorisation.
All FCA-regulated mortgage advisers must also comply with the Mortgage Credit Directive and follow the ICOBS (Insurance: Conduct of Business sourcebook) rules. This includes clear suitability reporting, detailed client file documentation, and complaints handling procedures. Professional indemnity insurance specifically covers failures in these regulatory obligations.
Brokers who introduce clients to lenders (rather than directly arranging mortgages) must still be FCA-authorised and carry professional indemnity cover. Brokers who hold client money in client accounts must also demonstrate specific protections against misappropriation, typically evidenced through insurance or trust accounting.
How much does mortgage brokers insurance cost?
£600 – £1,200 per year for sole traders; mortgage brokers with offices and support staff may pay £1,500 – £3,200 depending on business type and turnover
Real claims: what mortgage brokers insurance covers
A mortgage broker recommended a mortgage product that turned out to be unsuitable for the client's financial circumstances. The product had a three-year fixed period, after which rates ballooned. The client had to remortgage early, incurring costs and falling into negative equity.
Professional indemnity covered the settlement after the client's complaint to the FCA. The policy covered the cost of financial restitution and the legal defence against the FCA's investigation.
£34,500 total — £28,000 financial redress to the client, £4,200 FCA investigation costs, and £2,300 legal fees
A broker failed to disclose relevant fees and commission to a client as required by FCA regulations, leading to a complaint to the Financial Ombudsman Service (FOS). The client claimed they would not have proceeded if full disclosure had been made.
Professional indemnity covered the FOS award and the cost of complying with the ombudsman's binding decision, including legal representation throughout the complaint process.
£22,100 total — £18,500 FOS award, £2,200 legal representation fees, and £1,400 regulatory compliance costs
A broker neglected to obtain proof of income documentation, resulting in a mortgage that was subsequently found to be unaffordable under FCA affordability rules. The lender demanded early repayment, and the client incurred losses.
Professional indemnity covered the cost of settlement and the regulatory defence against the lender's and client's claims for breach of FCA rules.
£19,800 total — £15,500 settlement, £2,800 legal and regulatory defence, and £1,500 expert fees
WHY CECIL
Built differently.
Cover for mortgage brokers risks
Finance and property work carries significant professional liability. Cecil finds insurers who cover mortgage brokers specifically and understand the regulatory environment.
Regulatory compliance support
Professional indemnity covers the costs of defending regulatory complaints and investigations. Cecil ensures this is included in your policy.
Cyber protection for financial data
Mortgage Brokers handle sensitive client data. Cecil makes sure your policy includes cyber liability to protect against breaches and their consequences.
Competitive quotes from specialist insurers
Get your cover options from finance and property insurance specialists. Cover that reflects your profession, not a generic commercial policy.
Common questions about mortgage brokers insurance
Do mortgage brokers need professional indemnity insurance?
Professional indemnity is essential for finance and property professionals. It protects you if a client claims your advice or work caused them a financial loss.
What level of professional indemnity do mortgage brokers need?
Cover levels depend on your regulatory requirements and the value of transactions you handle. Cecil helps you choose the right level for your profession.
Do mortgage brokers need cyber insurance?
Given the volume of sensitive data handled by finance and property professionals, cyber liability is strongly recommended. It covers breach notification, investigation and regulatory fines.
Does mortgage brokers insurance cover regulatory complaints?
Yes, professional indemnity covers the costs of defending complaints from regulators, ombudsmen and professional bodies.
Do mortgage brokers need public liability insurance?
If clients visit your office or you visit properties and sites, public liability covers injury and property damage claims. Many clients require it.
Are mortgage brokers required by law to have professional indemnity insurance?
Yes. The FCA requires all authorised mortgage brokers to hold professional indemnity insurance with a minimum cover level of at least 60% of annual turnover. This is a condition of FCA authorisation and must be in place before you can legally trade.
What is the minimum cover level required by the FCA?
The FCA specifies minimum cover of at least 60% of annual turnover, with a floor of £2 million for larger firms. Your insurance provider and compliance team can advise on the appropriate level for your specific turnover and business size.
Does professional indemnity insurance cover FCA complaints and investigations?
Yes. Professional indemnity covers the cost of legal defence against FCA investigations, complaints handling, and Financial Ombudsman Service (FOS) decisions. It also covers the financial redress amount if a complaint is upheld.
Do mortgage brokers need specific insurance for client money handling?
If you hold client money, you must have additional protections in place, typically demonstrated through professional indemnity insurance with specific clauses covering misappropriation. Many firms also use client accounts held in the name of a licensed conveyancer or solicitor to reduce this risk.
What areas of FCA compliance does professional indemnity insurance cover?
It covers failures in suitability testing, inadequate disclosure of fees and risks, failures in documentation, and breaches of ICOBS rules. It does not cover regulatory fines imposed by the FCA itself, but it does cover the cost of legal defence and restitution to clients.
Interested in Mortgage Brokers insurance?
We will be in contact when Cecil launches.