Brokers are being warned to review their professional indemnity (PI) insurance in response to an increase in award limits set to be introduced.
The Australian Financial Complaints Authority (AFCA), which is due to begin taking complaints from November 1, was authorised in May.
It has forecast an increase in the award limits from the current maximum of $323,500 for any one claim, to $500k.
The Finance Brokers Association of Australia (FBAA) is encouraging brokers to talk to their providers.
Executive director Peter White reassured brokers who have policies with the association’s preferred PR Insurance provider, Insurance Advisernet Australia, that they will continue to be protected.
“[The] change means that unless brokers review and potentially increase their PI insurance levels they may not be adequately protected should a claim of this type be made after November 1.
“We have received written confirmation that the ‘Finance Brokers PI Plus Policy’ with Insurance Advisernet will be altered to cover EDR awards up to $500K for any one claim or up to $1M in the annual aggregate for all new policies and/or renewals issued as from November 1, 2018.
“It means any existing member’s policies that fall due for renewal after this date will benefit from an automatic increase to the above limits for no additional premium charge.”
White encouraged brokers with questions to contact Insurance Advisernet national product manager, Darren Loades by phone on 07 5538 7655 or email [email protected].