Insurance for Financial Institutions.

Most private lenders and non-bank lenders carry professional indemnity insurance as the foundation, since it responds to claims about valuations, credit assessments or advice, alongside management liability given the regulatory scrutiny this sector faces and cyber liability given the volume of borrower and investor data typically held.

In most cases, yes. Holders of an Australian Credit Licence generally need to demonstrate adequate professional indemnity cover as part of meeting their compensation arrangements under ASIC Regulatory Guide 210, and are asked to provide a certificate of currency as part of holding the licence. Please speak with a qualified adviser about how this applies to your specific licence.

No, this is worth understanding clearly. Professional indemnity responds to a claim that a valuation, credit assessment or piece of advice was negligent, not to the credit risk of a borrower failing to repay a loan. A loan that simply goes bad is a lending outcome, not an insurance claim, unless there was negligence behind how it was assessed or approved.

Professional indemnity responds to a claim that a valuation, credit decision or piece of advice given to a borrower or investor was negligent. Management liability responds to claims and regulatory investigations tied to how the business itself, and the individuals running it, are managed. Licensed trustees and fund managers commonly carry both given the level of regulatory attention on this sector.

Brokers need professional indemnity cover just as much as lenders do, but the exposure is different, not the requirement. A broker acts on behalf of the borrower to arrange finance, rather than holding or funding the loan themselves, so a claim is more likely to centre on the advice given or the suitability of what was arranged. The field of cover is the same, professional indemnity, but what it needs to respond to is shaped by that different relationship with the client.

Yes. ASIC published a dedicated report on private credit in Australia in September 2025, focused on valuation practices, liquidity management, disclosure and governance at licensed trustees and fund managers in this sector. This level of regulatory attention is a factor worth considering when arranging management liability cover.

Yes, this is exactly the kind of exposure cyber liability is designed to respond to. Lenders and fund managers hold significant volumes of financial and identity data as a core part of the work, which makes a breach both more likely to be significant and costly to respond to.

Professional indemnity is typically arranged on a claims-made basis, meaning the policy in place when a claim is made and notified is the one that responds, not necessarily the policy that was current when the original valuation, advice or lending decision took place. This makes continuous cover particularly important for this type of insurance.

This depends on the size of the loans typically written, whether lending is funded from the business's own balance sheet or pooled investor capital and the licence conditions that apply. A smaller private lender may find cover in the $1 million to $2 million range sufficient, while a fund manager handling larger pooled lending may require limits of $5 million or more.

Insurers typically ask for the type of lending or fund management activity, whether the business holds an AFSL or Australian Credit Licence, annual loan book or funds under management, the limit of indemnity required and claims history. A broker can help present this information accurately to the market.

A previous decline does not rule out cover elsewhere. Private lending and fund management is a specialist area for insurers, and a broker with the right panel can often place risks that a single insurer has turned down.