Professional Indemnity Insurance for Mortgage Brokers
27 July 2023
As a Mortgage or Finance Broker, there are many insurance risks you may encounter within your professional practice. It is important that in the event one of these risks arises, you have adequate coverage to assist you.
The Australian Securities & Investments Commission (ASIC) requires Mortgage Brokers to have adequate Professional Indemnity insurance coverage.
What does Professional Indemnity insurance cover you for?
Professional Indemnity Insurance is designed to protect you and your business against allegations of wrongful doings arising from your professional services. Professional Indemnity protects you from:
- Professional misconduct, such as providing misleading advice.
- Negligent advice.
- Defamation, libel, or slander.
- Breach of duty, including confidentiality and other privacy issues.
- Loss of or damage to documents.
- Infringement of intellectual property rights.
It is important to note that the value of professional indemnity insurance is for both you and your clients.
How do I benefit from insurance?
As a business owner there are many risks that may arise when dealing with consumers. A consumer dissatisfied with an action or service may result in a long and costly legal process. Evidently, this can leave a large financial impact on your business, as well as an overall negative effect on your professional reputation.
What do I need to report to my insurer?
Examples of incidents that may occur that you should inform your insurer of include:
- A complaint to AFCA.
- If you are accused of failing to provide a service as promised or advertised.
- A client has made a complaint about your service – even if you feel this complaint is unjustified.
- Any mistake, oversight or omission in your work, or the work of your credit representatives or employees, that you are aware of and could potentially lead to a claim being made Even if your client is not aware of it.
- Any complaint that your aggregator receives or is processing on your behalf.
What happens if I don’t report a potential claim?
Failure to notify your insurer as soon as reasonably possible could potentially lead to a claim being rejected. If you are unsure or in doubt about a claim, you can call our team for guidance.
What should I do if I am notified of a complaint made to AFCA?
If a complaint has been made to AFCA, notify us immediately. The insurer will review the complaint and may make the decision to appoint solicitors with expertise in the dispute resolution process.
For more information on Professional Indemnity Insurance for Mortgage Brokers click here.
Have a question?
The team at insurance.com.au are here to help with all your Professional Indemnity needs! Speak to a member of our team on 1300 468 730 or fill out the contact form below.