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Fears of a rapid rise in professional indemnity insurance costs due to complaints are misplaced as most queries will be against providers, claims the Association of Mortgage Intermediaries.

In an overview of the professional indemnity market for mortgage intermediaries, professional indemnity specialist PYV has raised concerns that the biggest threat to advisers was the state of the housing market as individuals look for someone to blame when deals go wrong.

It also stated providers of mortgage PI are concerned about the exposure to equity release and mortgage fraud claims. Citing the current bad press surrounding self-cert mortgages and the sale of some types of payment protection insurance, coupled with an increased volume of claim notifications could have the effect of hardening the mortgage intermediary PI market, making cheap premiums, under £500, a thing of the past.

However, Richard Farr director for the Association of Mortgage Intermediaries, said this was a broad overview of the professional indemnity market and said claims against mortgage advisers remained historically low.

He said: "It would be untrue to say the mortgage market is not experiencing stresses and strains at the moment. However, some businesses are finding their PI charges have changed very little.

"The Financial Services Ombudsman has said there will be increase in complaints due to difficult trading conditions however even Fos are predicting only 5 per cent of their projections will actually be against mortgage intermediaries. Most will be concerning providers."

The report also warned all mortgage intermediaries carrying out general insurance activities will be affected by the euro's rise against the pound as the minimum limit of indemnity they are required to hold was set by the insurance mediation directive in euros.

Andrew Fisher, chief executive for Towry Law, said given the current situation of people being fined, the average PI would almost certainly increase.

He said: "We have heard on the grapevine the average PI for those still working on the old-style commission has gone up and it is likely to do so. Providers are adjusting for what they see are they current risks.

"I would say there will be a rise in claims as well although time will tell who will be the main targets. It must be remembered some will be genuine and we should be careful not to assume they are all from opportunists looking to get on a band wagon."