FCA IPRU-INV professional indemnity requirements for financial advisers

Reviewed by Matthew Bartlett, Director, Apex Insurance Brokers Limited · Last reviewed 2026-08-05

If you advise retail clients on investments, pensions or other packaged products, your firm sits in a different prudential regime from a general insurance or mortgage broker. That distinction changes which professional indemnity (PI) rules apply to you. This page explains the structure of the requirement in IPRU-INV, how it differs from MIPRU, and why the headline figures are expressed in euros.

Which rulebook applies to a personal investment firm

The FCA maintains several prudential sourcebooks. The one that governs professional indemnity cover for a financial adviser is IPRU-INV — the Interim Prudential sourcebook for Investment Businesses. Within it, Chapter 13 sets out the requirements for personal investment firms, the category most independent and restricted advice businesses fall into.

By contrast, MIPRU (the Prudential sourcebook for Mortgage and Home Finance Firms, and Insurance Intermediaries) governs PI cover for general insurance intermediaries, mortgage advisers and home finance firms. Both regimes require PI insurance and both derive their minimum limits from EU-inherited legislation, but the detail sits in different rulebooks. Applying the wrong one is a common cause of an inadequate policy.

If your firm is dual-regulated — giving investment advice and arranging general insurance, for example — your policy may need to satisfy the requirements of more than one sourcebook at once. That is worth checking carefully with a broker who understands both regimes.

Why the minimums are in euros

The professional indemnity limits in IPRU-INV are expressed in euros because they originate in EU-derived law inherited into the UK rulebook. The requirement sets a minimum in two parts:

• A minimum limit of indemnity for any single claim, and
• A higher minimum annual aggregate limit covering all claims in the policy year.

Because the figures are denominated in euros, the sterling equivalent your policy must meet can move, and the underlying euro amounts are periodically revised. For that reason we deliberately do not quote a fixed pound figure here. The correct approach is to confirm the current euro minimums published by the FCA in IPRU-INV and convert them to sterling at the point you buy or renew.

Ask Apex to confirm the current IPRU-INV limits for your firm →

Additional cover for higher income

The base euro minimums are a floor, not a ceiling. IPRU-INV recognises that a larger advice firm carries a larger potential liability, so the requirement scales. In broad terms, firms with higher income are expected to hold PI cover above the base minimum, increasing in line with the size of the business.

Separately, the rules address policy excesses. Where a firm's PI policy carries excesses above a permitted level — or where cover contains exclusions the rules restrict — the firm may be required to hold additional capital resources to make up the gap. In other words, a cheaper policy with a high excess can create a capital obligation elsewhere on the balance sheet.

The practical takeaway: two IFA firms doing similar work can face genuinely different PI obligations depending on their income and how their policy is structured. Sizing cover is not a one-number exercise.

IPRU-INV vs MIPRU at a glance

This table summarises the structure only. Confirm the current figures and exact wording in the live FCA Handbook before relying on them.

What good cover looks like in practice

Meeting the minimum is the regulatory baseline, but it is rarely where a well-run advice firm lands. Sensible practice includes:

• A limit of indemnity comfortably above the IPRU-INV floor — common commercial options run to £1m, £2m or £5m depending on advice type and volume.
• Cover that reflects your higher-risk advice lines — defined benefit pension transfers and complex investments attract particular scrutiny.
• An excess set at a level you can absorb without triggering an additional capital requirement.
• Clear treatment of past business, appointed representatives and run-off if you wind down.

Because the euro minimums, income scaling and excess rules interact, the safest route is to have a specialist broker map your income and advice profile against the current IPRU-INV rules and then structure the policy around it.

Verify before you rely: the current-rules caveat

The euro minimums and their sterling equivalents are subject to periodic revision, and the FCA can amend IPRU-INV. Nothing on this page should be treated as the current binding figure. Before you buy, renew or restructure cover, check the live version of IPRU-INV in the FCA Handbook, or ask a broker to confirm the applicable limits for your firm's income and permissions on the day.

Common questions

Is an IFA covered by IPRU-INV or MIPRU for PI?

A personal investment firm giving investment advice falls under IPRU-INV, principally Chapter 13. MIPRU applies to insurance, mortgage and home finance intermediaries. Dual-regulated firms may need to satisfy both.

Why are the minimum PI limits shown in euros?

The limits are inherited from EU-derived legislation and are expressed in euros, with both a per-claim and an annual aggregate minimum. The sterling equivalent can move, so confirm the current figure at the point of purchase.

Does a bigger advice firm need more cover?

Yes. Above the base euro minimums, IPRU-INV expects cover to scale with income, and high policy excesses can create an additional capital requirement rather than reducing your obligation.

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.