Professional liability insurance
Mandatory insurance covering the intermediary for harm caused to clients in the course of their work, advice error, breach, negligence. Together with the financial guarantee, it conditions ORIAS registration. It is an essential safety net for borrower and professional alike.
Key points
Frequently asked questions
What types of claims does professional liability insurance actually cover?
Professional liability insurance mainly intervenes for advice errors, for instance recommending a product unsuited to the client's situation, but also for procedural failures such as forgetting to provide the ESIS or to formalise the needs analysis. It can also cover administrative errors that caused a detrimental delay for the borrower. Each policy defines its exclusions, which a savvy broker reads carefully before subscribing.
What is the difference between professional liability insurance and the financial guarantee?
Professional liability insurance protects against the consequences of a professional fault that causes harm to the client. The financial guarantee, on the other hand, covers client funds that the intermediary has collected on their behalf in case the professional defaults. Both are often required together at ORIAS, but they address distinct risks: one covers advice, the other covers the holding of money.
How do you choose the right level of professional liability cover for your firm?
The regulatory minimum is a floor, not an optimum: a firm handling complex files or large amounts has good reason to take out higher cover. You should also check per-claim and annual caps, deductibles and exclusions for activities outside the ORIAS scope. An insurance broker specialising in professional liability for regulated professions can help calibrate the policy to the firm's actual portfolio.
In practice
A credit broker mistakenly recommends an interest-only bullet loan to a client whose income is not suited to repaying the principal in a single lump sum. At maturity, the client suffers a financial loss and brings a claim against the broker. Professional liability insurance covers the compensation after expert assessment, sparing the professional from personally bearing the cost of their error.
Official sources
- Article R519-16 CMF (IOBSP professional liability insurance) · Légifrance
- Article L519-1 of the Monetary and Financial Code · Légifrance
- Prudential supervision and resolution authority · ACPR (Banque de France)