The FCA's minimum professional indemnity insurance (PII) limits depend on what a firm does. A financial adviser that is not an IDD insurance intermediary and has relevant income up to £3 million needs at least £500,000 per claim and £500,000 in aggregate (IPRU(INV) 13.1.13R). An insurance intermediary needs at least EUR 1,300,380 per claim and EUR 1,924,560 in aggregate (MIPRU 3.2.7R). Most mortgage brokers need at least EUR 460,000 per claim and EUR 750,000 in aggregate (MIPRU 3.2.9BR). Excesses above the set caps, and exclusions of business the firm does, must be backed by extra capital.
This guide puts every PII limit, excess cap and capital top-up for advisers, mortgage brokers and insurance intermediaries in one place, as the rules stand in the FCA Handbook on 15 November 2026.
Which firms must hold PII
| Firm | Rules | Notes |
|---|---|---|
| Personal investment firms (most financial advice firms) | IPRU(INV) 13.1 | Covers investment and pension advice, and insurance distribution where the firm also does it |
| Insurance intermediaries | MIPRU 3.2 | Brokers and other firms carrying on insurance distribution |
| Home finance intermediaries | MIPRU 3.2 | Mortgage brokers and other home finance mediation firms |
| Principals with appointed representatives | The principal's own rules | The principal's PII must cover current and former ARs, including introducer ARs, where the rules require |
A firm can rely on a comparable guarantee from a bank, building society or insurer instead of a policy, on terms at least equal to the PII rules. For a personal investment firm, the insurer must be authorised to write PII in the UK, or be of equivalent status in a Zone A country, the Channel Islands, Gibraltar, Bermuda or the Isle of Man.
Minimum limits of indemnity
| Firm | Single claim | Aggregate per year | Rule |
|---|---|---|---|
| Personal investment firm, not an IDD insurance intermediary, relevant income up to £3 million | £500,000 | £500,000 | IPRU(INV) 13.1.13R |
| Personal investment firm, not an IDD insurance intermediary, relevant income over £3 million | £650,000 | £1,000,000 | IPRU(INV) 13.1.13R |
| Personal investment firm that is an IDD insurance intermediary | EUR 1,300,380 | EUR 1,924,560 | IPRU(INV) 13.1.10R |
| Personal investment firm, relevant income over £10 million | As above | From £2,000,000 at £10 to £12.5 million, rising to £22,500,000 over £300 million | IPRU(INV) 13.1.19R |
| Insurance intermediary | EUR 1,300,380 | Higher of EUR 1,924,560 and 10% of annual income, up to £30 million | MIPRU 3.2.7R |
| Mortgage adviser or arranger under the Mortgage Credit Directive | EUR 460,000 | EUR 750,000 per calendar year | MIPRU 3.2.9BR |
| Other home finance intermediary | Higher of £100,000 and 10% of annual income, up to £1 million | Higher of £500,000 and 10% of annual income, up to £1 million | MIPRU 3.2.9R |
For a personal investment firm, "relevant income" is all commission, brokerage, fees and related income for the last accounting year before the policy starts or renews, whether or not it comes from regulated activities (IPRU(INV) 13.1.8R). Where one policy covers several firms, their income is combined and each firm must have the full minimum limits.
Where a policy is not in euros, the firm must take reasonable steps to ensure the limits are at least equivalent to the euro amounts when the policy is taken out and at each renewal. A sterling policy bought at a margin above the minimum avoids a shortfall if exchange rates move.
Excess caps
| Firm | Maximum excess without extra capital | Rule |
|---|---|---|
| Personal investment firm | £5,000 on any claim | IPRU(INV) 13.1.25R |
| Mortgage or insurance intermediary, no client money | Higher of £2,500 and 1.5% of annual income | MIPRU 3.2.11R |
| Mortgage or insurance intermediary, holding client money | Higher of £5,000 and 3% of annual income | MIPRU 3.2.12R |
A firm can take a higher excess if it holds additional capital calculated from the tables in IPRU(INV) 13.1.27R or MIPRU 3.2. For a personal investment firm, the excess that counts is the highest excess in the policy, unless it relates to a type of business the firm has never done.
Exclusions and the extra capital they cost
A personal investment firm's policy must not exclude any type of business the firm has carried out in the past or will carry out during the policy, or liabilities crystallised by regulatory action, unless the firm holds additional capital (IPRU(INV) 13.1.21R and 13.1.23R). The FCA accepts exclusions for business lines the firm has never done and will not do, and for claims already notified under another policy.
| Relevant income | Minimum additional capital for an exclusion (IPRU(INV) 13.1.23R) |
|---|---|
| Up to £100,000 | £5,000 |
| £200,000 to £300,000 | £18,000 |
| £500,000 to £600,000 | £25,000 |
| £900,000 to £1,000,000 | £31,000 |
| £2,500,000 to £3,000,000 | £51,000 |
| £9,000,000 to £10,000,000 | £95,000 |
The table above shows selected bands. The full table has bands from £0 to over £100 million. The FCA's guidance is that a firm should hold more than the minimum where the table gives insufficient cover for its circumstances. Additional capital must be readily realisable own funds, meaning items that can be realised within 90 days.
Pension transfer exclusions are the most common example. A firm that advised on defined benefit transfers in the past and cannot buy cover for that work must hold the additional capital, on top of its normal capital resources requirement.
Terms every policy must include
- cover for claims arising from the acts or omissions of the firm, its employees, its appointed representatives and its other agents
- for a personal investment firm, full retroactive cover for past work, and for a mortgage or insurance intermediary, continuous cover from the date of permission
- cover for Ombudsman awards made against the firm
- no conditions or exclusions that unreasonably limit cover
- for a personal investment firm, no limit on cover where the firm, a fund it recommended or another person defaults, or where someone other than the firm (such as the Financial Services Compensation Scheme) makes a claim, with a statement in the policy that it complies with IPRU(INV) 13.1.20AR
- for a personal investment firm, the FCA does not consider it reasonable for legal defence costs to count towards the limits where that reduces the cover available for a substantive claim
How the minimums interact with the rest of the business
The minimums are a floor. The FCA's guidance asks firms to consider whether overall cover is adequate for their actual risks, including legal defence costs. Firms with larger books, higher risk advice, or exposure to Ombudsman awards above the minimum limits should buy more.
PII also drives the application. A firm moving to direct authorisation needs a compliant policy in force from the day permission takes effect, and the business plan, projections and capital must reflect its premium, excess and any exclusions. See our guides to becoming a directly authorised financial adviser, starting a mortgage brokerage and starting an insurance brokerage.
Reporting and notifying the FCA
Firms self-certify their PII in section E of the Retail Mediation Activities Return (RMAR). A problem with cover, such as a renewal that cannot be placed on compliant terms, is also likely to be a matter the firm should raise with the FCA promptly under its general duty to be open with its regulator. Under a shared policy, each named firm must notify the FCA if the aggregate cover falls below the minimum limits.
How Regulatory Counsel helps
We review PII against IPRU(INV) 13 and MIPRU 3, calculate additional capital for excesses and exclusions, and build PII into FCA applications and capital plans. See our licensing and authorisation and compliance support services, and our sector pages for investment and wealth firms, mortgages and insurance.