Broker-arranged
Mortgage broker insurance
A credit licensee that arranges loans for consumers must hold professional indemnity insurance: ASIC’s Regulatory Guide 210 sets the minimum at $2 million per claim and in the aggregate, scaling with revenue. Since 2021 the best interests duty has added a clear basis for client claims. Here is what the licence requires, what an aggregator’s policy does and doesn’t do for a credit representative, and the covers a brokerage holds beyond PI.
- RG 210: $2 million minimum PI for credit licensees
- What an aggregator’s policy covers, and what it doesn’t
- Cyber, management liability and office cover
What insurance does a mortgage broker need?
Professional indemnity that meets ASIC’s compensation requirements for credit licensees: at least $2 million per claim and in the aggregate, and roughly equal to your revenue from consumer credit activities above that, up to a $20 million cap. Credit representatives work under their licensee’s policy and must confirm it covers them. Beyond PI: cyber cover for the identity documents and financials you hold, management liability if you employ staff, public liability for the office, and workers compensation from the first employee.
Lenders’ claims are excluded from ASIC’s minimum because they can exhaust a policy quickly. If lender claims are a risk for your business, that cover is assessed separately.
What ASIC requires of a credit licensee
| Requirement | What RG 210 and RG 273 say |
|---|---|
| Compensation arrangements | A credit licensee that isn’t APRA-regulated must have adequate arrangements to compensate consumers. PI insurance is the primary way to comply. |
| Minimum cover | At least $2 million per claim and in the aggregate, for licensees doing non-lending credit activities such as mortgage and finance broking. |
| Scaling | Above the minimum, cover approximately equal to actual or expected revenue from consumer credit activities, up to a cap of $20 million. |
| Adequacy | Judged on the amount, the scope, and whether exclusions and conditions undermine the policy. |
| Best interests duty | Mortgage brokers must act in the consumer’s best interests when giving credit assistance, and give priority to the consumer’s interests where a conflict arises. ASIC’s October 2026 review of the duty notes every licensee must hold PI and may claim on it when a complaint is lodged. |
| Disputes | Membership of the Australian Financial Complaints Authority is a licence condition. AFCA decisions are where PI insurers see most broker claims. |
The covers a brokerage usually holds
| Cover | Why |
|---|---|
| Professional indemnity | A client who says the loan wasn’t in their best interests, a missed settlement, or an error in an application. The licence requires it. |
| Cyber insurance | Identity documents, payslips and bank statements make a brokerage a prime target. A breach is also a notifiable data breach. |
| Management liability | Employment claims and the cost of responding to an ASIC or AFCA investigation. |
| Public liability | Clients visiting the office. |
| Fidelity or crime cover | Theft of client funds or trust money by an employee. |
| Workers compensation | Compulsory once you employ, in every state. |
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Mortgage broker insurance questions
How much professional indemnity insurance must a mortgage broker hold?
ASIC’s Regulatory Guide 210 requires a credit licensee doing non-lending credit activities to hold at least $2 million per claim and in the aggregate, rising with revenue from consumer credit activities up to a $20 million cap. Claims by lenders are excluded from that minimum.
I’m a credit representative. Does my aggregator’s PI cover me?
If you act under their licence, their compensation arrangements must cover your credit activities. Ask for the certificate, check the excess you’d be liable for, and check what happens to claims made after you leave. A representative who also holds an AFS authorisation or does other work may need their own policy.
Does PI cover a best interests duty claim?
A civil claim by a client for loss caused by advice that wasn’t in their best interests is the kind of claim PI is for, subject to the policy terms. Penalties imposed by ASIC are not insurable, and dishonest conduct is excluded.
Do I need public liability as a mortgage broker?
If clients visit your office or you visit theirs, yes. It covers injury and property damage, which PI doesn’t, and leases usually require it.
Why is mortgage broker insurance arranged by a broker?
Financial-services PI is a specialist class with wording on retroactive dates, run-off, lender claims and regulatory investigations that has to match the licence conditions. An insurance broker places it with the insurers that write credit licensees and reviews the limit against your revenue each year.
Keep reading
More industries arranged by a broker
Sources
- ASIC: Regulatory Guide 210, compensation and insurance arrangements for credit licensees
- ASIC: Regulatory Guide 273, mortgage brokers and the best interests duty
- ASIC: Report 840, mortgage brokers: review of best interests duty and complaints (October 2026)
- Australian Financial Complaints Authority
- business.gov.au: Types of business insurance
Credit licensees