Professional Indemnity Insurance for New Mortgage Brokers — Your First Policy (2026)

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

1. Do you actually need PI as a new mortgage broker?

For most mortgage brokers, the honest answer is yes — and there are two separate reasons, either of which would be enough on its own.

The regulatory reason. Advising on and arranging regulated mortgage contracts is a regulated activity, so you either hold direct authorisation from the Financial Conduct Authority (FCA) or you operate as an appointed representative of a principal firm. If you are a directly authorised firm carrying on home finance mediation, the FCA's Prudential sourcebook for Mortgage and Home Finance Firms, and Insurance Intermediaries — better known as MIPRU — requires you to hold professional indemnity insurance that meets a minimum standard. This isn't a "nice to have" you can defer; it's a condition of doing the work.

One important distinction for newcomers: if you are joining a network as an appointed representative, your principal firm is usually responsible for arranging PI cover that extends to you, and you should check exactly what their policy does and doesn't cover before you assume you're protected. If you are setting up as a directly authorised firm — your own FCA permissions, your own compliance — then arranging your own PI is squarely your responsibility. This guide is written mainly with that directly authorised firm in mind, but it's worth reading either way so you understand what you're relying on.

The client and commercial reason. Even setting the rulebook aside, PI exists because advice can go wrong. A mortgage recommendation that turns out to be unsuitable, an affordability assessment that's later challenged, a protection need that gets overlooked, a missed deadline on a rate that expires, an administrative slip that costs a client money — any of these can turn into a complaint, and complaints about advice can escalate to the Financial Ombudsman Service. PI is what stands between a single mistake and a bill you pay personally. For a new firm without reserves, that protection is the difference between a bad week and the end of the business.

2. When cover must start — and why day one matters

The instinct of a lot of first-time buyers is to wait: get the first few clients through the door, see whether the business is really going to fly, then sort out insurance. With PI, that's the wrong order.

Your cover should be live from your first client engagement — the first moment you're giving advice or arranging a mortgage for someone who is relying on you. There are two reasons this is non-negotiable. First, as a directly authorised firm your FCA permissions come with the expectation that PI is in place; you shouldn't be trading regulated business without it. Second, and just as importantly, the way PI responds to claims means a gap at the start can never be filled in later. If a problem arises from work you did before your policy incepted, and you weren't insured at the time, no future policy will pick it up.

So "day one" isn't a compliance nicety. It's the day your professional exposure begins, and it should be the day your cover begins too. The good news is that arranging a first policy is fast — you don't need to be fully up and running to get insured. You can put cover in place before you take on your first case.

3. How much cover a new firm needs

"Limit of indemnity" is the maximum your insurer will pay out. For a mortgage broker, three things shape the right figure.

The MIPRU minimum. Because you're a regulated firm, you can't simply pick any number. MIPRU sets minimum limits of indemnity that your policy must meet — expressed both per claim and in the aggregate across a year — with the required figure increasing in line with your annual income if a percentage-of-income calculation produces a higher amount than the fixed floor. If you also carry on insurance distribution activity (for example arranging buildings and contents cover, or life and protection products alongside mortgages), separate minimum-limit requirements can apply to that side of the business too. The practical takeaway: the FCA rules give you a floor, and your broker's job is to make sure the policy you buy clears it.

What you actually do. The regulatory minimum is a starting point, not a ceiling. Think about the size of the mortgages you advise on, the volume of cases you expect to write, and whether you touch related areas such as protection, general insurance or specialist lending. A firm handling a small number of straightforward residential cases has a very different exposure profile from one advising on large loans, buy-to-let portfolios or complex affordability situations.

What third parties require. Some lenders, networks, packagers and mortgage clubs will only work with brokers who hold a stated minimum limit. It's common to see limits such as £1m, £2m or £5m referenced as options for firms in this space; the right one for you depends on your activities and any panel or partner requirements. Check your obligations before you choose — buying just above a mandated limit is far cheaper than discovering you fall short of one.

4. What a first policy costs — and what underwriters look at

We won't quote a price, because an honest one doesn't exist until an underwriter has seen your details — and anyone who gives you a firm figure before that isn't really quoting your business. What we can do is explain what actually moves the number, so nothing comes as a surprise.

For a new firm with no trading history, underwriters lean on a small set of sensible signals:

• Your projected turnover or income. This is the single biggest driver. As a new firm you'll give a reasonable estimate rather than audited figures, and that's expected — nobody has last year's accounts on day one.
• The activities you'll carry out. Residential mortgage advice, buy-to-let, protection, general insurance, equity release, commercial or specialist finance — each adds a little to your risk picture. Be accurate about what you'll actually do.
• Qualifications and experience. Relevant mortgage qualifications (for example CeMAP or equivalent) and the experience you and your advisers bring reassure an underwriter that the advice will be sound, even if the firm itself is new.
• The limit of indemnity you choose. A higher limit means more potential exposure for the insurer, and is reflected in the premium.
• Your regulatory status and controls. Being properly authorised, with sensible compliance processes and clear client records, tells an underwriter you take the work seriously.

Here's the encouraging part: a brand-new firm has no claims history to explain. There's no back-catalogue of past problems to disclose, no complex prior years to price for. In that specific sense, buying your very first policy can be more straightforward than a renewal for an established firm — you're a clean sheet, and underwriters treat you as one.

5. "Claims-made" — explained simply, and why continuity matters

This is the one concept every first-time PI buyer needs to genuinely understand, because it works differently from the insurance you already know.

Your car or home insurance is "occurrence" based: it responds to events that happen during the policy year. PI is claims-made, which means it responds to claims that are first made against you during the policy year — regardless of when you did the work that led to them.

Why does that matter so much for a new firm? Because mortgage advice can be questioned long after it's given. A client might not realise there's a problem until years down the line — perhaps when they remortgage, or their circumstances change. For your PI to respond, you need a live policy at the moment the claim is made, and — crucially — you need to have held continuous cover stretching back to when you did the work. That earliest date is your "retroactive date".

For a new firm, this is actually clean and simple: your retroactive date is the day you started trading, and as long as you renew each year without a gap, everything you've ever advised on stays covered. The mistake to avoid is letting cover lapse — even briefly. A gap can leave a hole that no future policy fills, because once you drop cover, past work becomes uninsurable. Continuity, from your first policy onward, is the whole game.

6. How to buy your first policy — what you'll need

Buying PI for the first time sounds daunting; in practice, the information required for a new firm is modest. Have these to hand and the process is quick:

• Your firm details — trading name, structure (sole trader, partnership or limited company) and FCA authorisation status or reference, or confirmation you're mid-application.
• An estimate of your first-year income or turnover — a realistic projection is fine.
• The activities you'll carry out — mortgages, protection, general insurance and any specialisms.
• Qualifications and experience of you and any advisers.
• The limit of indemnity you want — we'll help you land on the right one, factoring in the MIPRU minimum and any partner requirements.

Notice what's not on that list: years of accounts, a claims record, a long compliance file. As a new firm you simply don't have those, and you're not expected to. That's why a first policy can often be quoted faster than you'd think. Start your quote and see for yourself.

7. Common first-timer mistakes to avoid

• Leaving it until after your first case. The exposure starts with your first client, so the cover should too. Waiting creates a gap you can't backfill.
• Buying to the bare minimum without checking who requires what. The MIPRU floor is a floor. Lenders, networks and clubs may demand more — confirm before you choose your limit.
• Assuming you're covered by your network. If you're an appointed representative, read the principal's PI arrangements carefully. If you're directly authorised, the responsibility is yours alone — don't assume otherwise.
• Under-declaring your activities to save money. If you tell an insurer you only do residential mortgages but you're also advising on protection or buy-to-let, a claim could be disputed. Accurate disclosure protects you.
• Letting cover lapse to save a month's premium. Because PI is claims-made, a break in cover can strand every piece of advice you've ever given. Never allow a gap.
• Guessing on turnover wildly. A realistic income estimate matters. Wild over- or under-estimating can either cost you more than needed or leave your cover out of step with the business.

8. About Apex — and why we can quote this quickly

Apex Insurance Brokers Limited is an FCA-authorised broker (FRN 724952) based in Bristol. We work with new and first-time buyers all the time, and we understand the position you're in: keen to start trading, conscious of the rules, and wary of over-buying or under-buying on something you've never purchased before.

Because a new mortgage broker has a clean, simple risk to present, we can move fast. Give us your details, and we'll help you clear the MIPRU minimum, match any lender or network requirement, and put continuous cover in place from day one — explained in plain English, with a real person to talk to if anything's unclear. No jargon, no pressure, and no leaving you to work out the rulebook on your own.

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.