Broker vs insurer vs MGA: who does what in PI insurance?
Reviewed by Matthew Bartlett, Director, Apex Insurance Brokers Limited · Last reviewed 2026-08-05
When you buy professional indemnity (PI) insurance, several businesses may sit behind that single policy. Knowing which one does what matters, because it tells you who ultimately pays a claim, who set the terms, and who is actually on your side. This guide separates the three roles and explains why using a broker changes the outcome for you.
The insurer: who carries the risk
The insurer is the company that accepts the financial risk and pays valid claims. When your policy responds to a negligence allegation, defence costs and any settlement come from the insurer's capital. In the UK, insurers are authorised and regulated by the Prudential Regulation Authority and the Financial Conduct Authority, and must hold reserves to meet claims.
PI capacity often sits in the company market or at Lloyd's of London, where syndicates provide the underwriting capital. Either way, the insurer is the ultimate risk-bearer — the name on the policy that stands behind the promise to pay. It is not, however, the party you usually deal with day to day, and it does not advise you on whether the cover fits your profession.
The MGA: underwriting on the insurer's behalf
A managing general agent is a specialist intermediary that an insurer authorises to underwrite on its behalf. Under a written delegated authority agreement (sometimes called a binding authority or binder), the MGA can quote, set terms, issue policy documents and sometimes handle claims — all within limits the insurer sets.
The crucial point: the MGA does not carry the risk. The capital that pays your claim still belongs to the insurer standing behind the binder. MGAs exist because they bring deep expertise in a niche — say, PI for surveyors, IT consultants or accountants — and can make faster, more tailored underwriting decisions than a generalist insurer. For you, a policy underwritten by an MGA is backed by a real insurer; the MGA is simply the pen holding the authority to write it.
The broker: acting for you
A broker is your agent. Unlike the insurer and the MGA, whose duties run toward the risk carrier, an FCA-authorised broker represents the client. That is the defining difference. A broker assesses what your business actually does, identifies the exposures a PI policy needs to answer, and approaches the market — insurers and MGAs alike — to find suitable terms.
A good broker also reads the wording so you do not have to guess. PI policies differ sharply on retroactive dates, aggregation clauses, defence-cost arrangements and the exclusions that matter most in your field. When a claim or circumstance arises, the broker helps you notify correctly and advocates on your behalf. Apex is a broker: we sit on your side of the table.
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The three roles side by side
| Role | Acts for | Carries the risk? | Main job |
|---|---|---|---|
| Insurer | Itself | Yes | Provides capital, pays valid claims |
| MGA | The insurer | No | Underwrites and issues policies under delegated authority |
| Broker | You, the client | No | Advises you, sources cover, handles claims for you |
Why using a broker helps
You can, in principle, approach an insurer or MGA directly. But when you do, the person setting the terms is working for the risk carrier, not for you. A broker rebalances that. Here is what a broker adds to a PI purchase:
- Market access. Brokers can approach multiple insurers and MGAs, including specialist capacity you may not be able to reach directly, and compare more than headline price.
- Correct limit and structure. Whether £1m, £2m or £5m of cover is right — and whether the limit should be on an each-claim or aggregate basis — depends on your contracts and clients. A broker helps you decide rather than guess.
- Wording scrutiny. Retroactive dates, aggregation, and profession-specific exclusions can quietly gut a policy. A broker checks the detail before you buy.
- Claims advocacy. If a claim or circumstance arises, your broker helps you notify properly and presses your case with the insurer.
- A duty to you. An FCA-authorised broker owes duties to the client and must treat you fairly — the MGA and insurer do not act in that capacity.
Want PI cover placed by a broker who works for you, not the insurer? Start here.
Get a PI quote →Common questions
If an MGA issued my policy, who actually pays my claim?
The insurer standing behind the MGA's delegated authority. The MGA underwrote and issued the policy, but the risk — and the money to settle a valid claim — sits with the insurer. Your policy documents will name the insurer providing the capacity.
Does a broker cost me more than going direct?
Not necessarily. Brokers are usually paid through commission built into the premium or a clearly disclosed fee. Because a broker can compare the market and structure cover properly, the value often lies in getting the right policy and avoiding a coverage gap, not just the price.
Can one company be more than one of these?
The roles are distinct, but a group may hold different permissions across separate entities. What matters is the capacity a firm is acting in for your policy — broking for you, or underwriting for an insurer. If you are unsure, ask; a broker will confirm who carries the risk behind your cover.
Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This guide is general information, not advice on a specific policy or a substitute for your policy wording.