Business Insurance For Finance and Mortgage Brokers 

Compare insurance quotes with Savvy to find the best policy for your finance or mortgage broking business. 

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, updated on July 17th, 2023       

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We’ve partnered with BizCover to bring you a range of business insurance policies to help you compare them side by side.

The public relies on finance and mortgage brokers to give out sound advice, but what happens if something goes wrong and a client claims the advice received was negligent or just plain wrong? That’s where business insurance comes in: to help defend your precious reputation and provide protection against such claims.   

You can compare quotes for all types of business insurance here with Savvy. Just answer a few simple questions about your broking business and the insurance you need and you’ll have multiple quotes from a range of respected insurers to compare online instantly. Use our quick and easy comparison service to make sure you get the best-value insurance for your broking business today. 

What types of insurance should I buy for my finance or mortgage broking business?

Because finance and mortgage broking businesses involve providing detailed and personal advice, having protection if something goes wrong is vital. The most important types of business insurance to consider are: 

Professional indemnity insurance 

Professional indemnity insurance covers you against claims that the advice, recommendations or service you provided were either wrong or negligent. It’s a vital type of insurance to have both for sole traders, partnerships and companies who offer professional advice or services to members of the public. Cover is available starting from $250,000 up to $10 million or more. 

Professional indemnity insurance is compulsory for many finance and mortgage broking professionals. For example: 

  • The Mortgage & Finance Association of Australia (MFAA) require professionals to hold a minimum of $2 million professional indemnity insurance with at least 12 months of run-off cover 
  • The Finance Brokers Association of Australia (FBAA) also requires members to have a minimum of $2 million of professional indemnity with seven years of run-off cover

What it covers 

  1. Payment of compensation if there’s a successful claim against you 
  2. Payment of court-awarded damages to the litigant 
  3. Cover for your legal defence costs 
  4. Cover for the cost of disciplinary proceedings or investigations 

Public liability insurance 

Public liability insurance is also essential for anyone in the finance or mortgage broking business. This type of insurance will cover you against claims that your business activity caused injury to a member of the public or damaged their property. This is particularly important for mortgage brokers, who may frequently visit clients in their own homes or offices. This insurance can offer between $5 million and $20 million worth of coverage. 

What it covers:  

  1. Third-party personal injury claims 
  2. Damage to a third party’s property 
  3. Legal fees to defend yourself 

General business insurance 

General business insurance may also be worthwhile to protect your business premises and any portable items such as laptops you may have. Commercial vehicles aren’t included, so you may need separate protection for your work car.  

What it covers: 

  1. Fire, storms, theft, vandalism and collision which cause damage to your business assets 
  2. Accidental damage to portable electronic items such as EFTPOS machines and laptops 
  3. Limited business interruption insurance if your business premises is damaged by an insured event 

Cyber liability insurance 

Cyber liability insurance in Australia can protect your business from a variety of forms of cybercrime. It is just as important to have such cover for finance brokers as it is for IT professionals, as brokers are likely to house a significant amount of sensitive information on their systems.  

What it covers 

  1. Data breaches including theft of client information 
  2. The cost of a forensic investigation into the cause of the breach 
  3. Data recovery costs 
  4. Cyber extortion and denial of service threats 
  5. Crisis management costs 
  6. Advertising and communicating with customers 
  7. Legal costs including any fines and penalties imposed

What isn’t covered under insurance for my broker business?  

The most common general exclusions include: 

  1. Injury to yourself or your employees 
  2. Flood damage 
  3. Unlawful activity or criminal negligence 
  4. Reckless behaviour or intentional damage 
  5. Anything to do with asbestos 
  6. The effects of pollution caused by your business activity 
  7. Damage to computer hardware 
  8. Upgrading of a system not related to cybercrime 
  9. Power outages or failure of satellite or telecommunication services 
  10. Prior known circumstances or risks 

How much will my business insurance policy cost? 

There is no set cost for a business insurance policy, as each finance or mortgage broker is different and faces unique risks. Many factors influence the cost of business insurance, including the following:  

  • The state you’re in 
  • Whether you live in a rural or urban area 
  • Whether you’re a sole trader, are in a partnership, or run a business 
  • Your business size and turnover  
  • If you have any employees 
  • Your insurance history 
  • Whether you’ve made an insurance claim in the past five years 

The main factor which will affect the cost of your insurance is the industry you’re in. All businesses in Australia are classified according to the risk their industry poses and are allocated a risk ratio. These ratios are used by insurers to calculate the comparative risk of any one business compared to another. 

However, the cost of business insurance for a company in Melbourne may not be the same as the cost for a similar finance or mortgage broking company in Perth, as your location also plays a part in determining insurance risk. 

You can find out how much any type of business insurance will cost in your state by comparing quotes right here with Savvy. Whether you need insurance as a sole trader or for your larger brokerage company, you’ll be able to find a policy that is perfect for your business needs right here.

Why do I need business insurance as a finance or mortgage broker?

Advising on mortgages and other finance is a big responsibility, as brokers often find themselves at the centre of major financial decisions. They’re a source of stress for many people and with such large amounts of money involved, livelihoods can be put at risk. Unfortunately, if things go wrong (for example, a house sale falls through), mortgage brokers can find themselves on the wrong end of a liability lawsuit.  

For this reason, if you want peace of mind, having professional indemnity insurance and general business insurance is an absolute necessity.  This business insurance will protect your interests no matter what the threat against your business is. 

Types of business insurance

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Common questions about business insurance for finance and mortgage brokers

How long does run-off cover for professional indemnity insurance last?

Run-off cover is an add-on to your professional indemnity insurance which protects you from liability risks in the seven-year period after you’ve sold your business, moved into another industry or retired. This is because the statute of limitation runs for six years, which means you can be held professionally liable for an issue up to six years after you’ve sold your business. 

If an authorised credit representative acts on behalf of a finance broker, are they also covered under professional liability insurance?

Yes – if an authorised officer or rep acts on behalf of a finance broker, the broker’s insurance automatically covers that rep or person who is acting on behalf of the licenced broker in cases of professional liability. 

Will professional indemnity insurance cover the cost of mediating a claim rather than going to court?

Yes – the cost of any claim settled via an ASIC-recognised external disputes resolution scheme (EDRS) can be covered up to the value of around $300,000 or more as part of your professional indemnity insurance. This is because it’s recognised that mediation can frequently lead to a resolution of a dispute for a far lower cost than taking court action. 

What information will I need to make a claim?

The information you should have to hand when you contact your insurance company to make a claim will include: 

  • The name of the policyholder 
  • Your policy number and start date (which can be found on your certificate of currency) 
  • A detailed description of the incident (what happened to cause the damage or loss) 
  • Specific dates and times when the incident happened 
  • Contact details of any other parties involved (or witnesses to the event) 
  • Details of your police report number (if a crime took place) 
  • Details of the property lost or damaged (including its age and value) 
  • Your bank details for settling the claim 

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Savvy is partnered with BizCover Pty Ltd (ABN 68 127 707 975, AFSL 501769) to provide readers with a variety of business insurance policies to compare. Savvy earns a commission from BizCover each time a customer buys a business insurance policy via our website. We don’t arrange for products to be purchased from these brands directly, as all purchases are conducted via BizCover.

Savvy does not compare all business insurance policies or providers currently operating in the market. Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy.

For any further information on the variety of insurers compared by BizCover or how their business works, you can read their Financial Services Guide.

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