Reynolds Porter Chamberlain (RPC) has issued a warning about the FSA's Treating Customers Fairly campaign.
The law firm says the TCF initiative could leave financial services companies with substantial uninsurable claims for which they have no legal liability.
Companies could feel pressurised to settle TCF complaints as quickly as possible in order to keep on good terms with the FSA.
RPC's Robbie Constance said: “You can act well within the law and still be seen by the FSA as not having treated your customer fairly. Professional indemnity insurers don't think they should be paying out claims to keep the FSA happy or to provide good PR for their insureds.”
“Financial services companies are going to be increasingly placed in the difficult situation of either having to risk the wrath of the FSA by refusing to pay compensation or not being able to recoup rising compensation claims from their insurer.”
