After identifying limitations in commercial lines insurance, the Financial Planning Association (FPA) is planning to launch its own group professional indemnity (PI) policy for members.

It is now calling for tenders from insurers for the policy.

FPA CEO Head of Professionalism Deen Sanders told insuranceNEWS.com.au the number of insurers offering PI cover to financial planners has greatly reduced in recent years.

“There is some uncertainty around the scope of the market,” he said. “We want genuine regulatory comfort.”

Mr Sanders says as it stands, if PI cover doesn’t satisfy members they have to “put their hand in their own pockets”. This is inhibiting members’ capacity to operate.

“We have seen exclusions creep in to the policies,” he said. “Some [insurers] have over-reacted to marketplace impacts.”

FPA members are understood to also be concerned about the variety of terms and conditions on offer. The association says the PI policy will offer a competitively priced, transparent product.

“Without adequate PI our members cannot practise,” Mr Sanders said. “As far as we’re concerned it’s a vital fundamental requirement.”

The policy will be launched by June 2. Tenders close on April 7.