NACFB offers members ‘unrestricted’ insurance cover for peer-to-peer

NACFB offers members 'unrestricted' insurance cover for peer-to-peer

The National Association of Commercial Finance Brokers (NACFB) has announced it will now offer members unrestricted insurance cover for peer-to-peer (P2P) lending.

Under the terms of NACFB membership, brokers must have professional indemnity insurance covering them against mis-selling claims from clients.

Until this month, insurance companies had restricted the amount of business commercial finance brokers could place with P2P lenders for their cover to stay valid.

However, following a meeting with Towergate Insurance, Lloyd’s of London insurer Beazley and P2P lender Funding Circle, the NACFB’s cover now contains no such restrictions.

Paul Goodman, chairman of the NACFB, said: “Peer-to-peer lenders came on to the market at the same time as payday lenders, and some insurers had confused the two.

“There was a perception that peer-to-peer lenders placed onerous terms and conditions on how the loans should be repaid, and that this would make commercial finance brokers vulnerable to charges of mis-selling.”

Paul explained that this misconception had left commercial finance brokers having to choose between growing with P2P lending or the security of legal and financial backing in the event of legal action.

“This makes NACFB’s exclusive cover the only policy in the market specifically designed for commercial finance brokers which covers an unlimited amount of brokered loans with peer-to-peer lenders,” added Paul.

“Peer-to-peer lending is booming and it’s fantastic that our members can now use it as much as they like, safe in the knowledge that they enjoy protection arranged by NACFB Insurance Services.”

Leave a comment