Why do app developers need insurance?
If a bug in your Android or iOS app causes a client to lose money, you could face a lawsuit. Mobile app developer insurance protects against legal costs over code errors, missed deadlines, and intellectual property (IP) claims. It also guards against risks like property damage, data breaches, and injuries.
Find the right coverage
Insureon helps application developers find small business insurance that matches your unique risks.
Get free expert advice and peace of mind knowing you have the right coverage for your app development company.
What types of insurance do mobile app developers need?
These insurance policies cover the most common risks of app development.
Technology errors and omissions insurance
Tech E&O, also called professional liability insurance, covers claims related to your work quality, such as a bug in a new app. You can add intellectual property and media liability coverage.
- Late release of a mobile app
- Failure to meet specifications
- Accusations of negligence
Cyber insurance
Cyber liability insurance covers financial losses caused by data breaches and cyberattacks. It's recommended for any app development business that handles sensitive info, like credit card data.
- Lawsuits from cyberattacks
- Client notification expenses
- Data breach defense costs
General liability insurance
This policy covers common risks that can affect any app developer, such as client injuries in your office. Bundle it with commercial property for savings in a business owner’s policy (BOP).
- Customer bodily injuries
- Customer property damage
- IP infringement claims
Fidelity bonds
This bond, also called an employee dishonesty bond, provides clients with reimbursement for employee theft. It may be required by client contracts.
- Illegal funds transfer by an employee
- Employee theft
- Employee fraud
Workers’ compensation insurance
Most states require workers' comp insurance for app development companies with employees. It also protects sole proprietors from work injury costs health insurance might deny.
- Employee medical expenses
- Disability benefits
- Legal fees from employee injuries
Commercial auto insurance
Commercial auto insurance covers property damage and medical bills in accidents involving business vehicles. Most states require this coverage for vehicles owned by a business.
- Car accidents
- Vandalism and theft
- Weather damage
How much does app developer business insurance cost?
Mobile app devs who buy policies through Insureon pay an average of $121 per month for E&O insurance and $40 per month for general liability insurance.
A mobile app developer who works independently will pay less for insurance than a large-scale cybersecurity company.
Factors that affect app developer premiums during underwriting include:
- Services offered
- Business property and equipment
- Business size and annual revenue
- Number of employees
- Types of insurance coverage purchased
- Policy limits and deductibles
- Endorsements, such as IP insurance
How E&O insurance protects your business
No, no, no! My client's network was working just fine last week!
You made a mistake, yeah, you made a mistake. You made a mistake, and it doesn't matter what you say. You missed the boat, now you will have to pay!
Actually, you have errors and omissions insurance. It covers legal costs if you make a mistake and your client sues you.
Mistake! Mistake! Ohhh, this was a mistake! Mistake! Mistake! Ohhh, this was a mistake!
You can get all the coverage your business needs by following this link. Protection is peace of mind!
How do I get app developer insurance?
It's easy to get business insurance for app developers if you have your company information on hand. Our insurance application will ask for basic facts about your business, such as revenue and the number of employees. You can buy a policy online and get a certificate of insurance (COI) with Insureon in three easy steps:
- Complete a free online application.
- Compare insurance quotes and choose policies.
- Pay for your policy and download a certificate.
Insureon's licensed insurance agents work with top-rated U.S. providers to find coverage that fits your mobile app business, whether you work independently or hire employees.
Verified business insurance reviews
Hear from customers like you who purchased small business insurance.
"Even small coding or privacy configuration errors in mobile apps can lead to major financial losses, which is why E&O and cyber coverage are essential for developers."
FAQs about business insurance for app developers
Review answers to frequently asked questions (FAQs) about app development insurance and more.
Why is business insurance necessary for app developers?
App developers handle user data, configure privacy settings, integrate third-party tools, and build software clients rely on. When something goes wrong, the financial impact can be significant.
For example, if your app is misconfigured and exposes user data, you could face a data breach claim. Clients may seek compensation for notification costs, regulatory penalties, legal expenses, and reputational harm.
Developers must also comply with privacy and security requirements set by Apple Inc. (iOS) and Google LLC (Android). A vulnerability or compliance failure can quickly turn into a costly lawsuit.
Cyber insurance helps cover expenses related to data breaches, ransomware, and other cyber incidents, including forensic investigations, notification costs, legal defense, and public relations support.
Professional liability risks extend beyond data security. If a bug, system failure, missed deadline, or integration issue causes financial harm to a client, you could be held responsible.
Technology errors and omissions insurance, also called tech E&O or tech professional liability insurance, helps cover legal fees, settlements, and court costs if a client claims your software or services caused financial loss. It may also help address intellectual property disputes, such as copyright infringement allegations.
Because app developers build mission-critical software and manage sensitive information, clients often expect proof of coverage. A single configuration error or software defect could easily result in $80,000 or more in legal costs and damages—making the right insurance an important safeguard for your business.
What other types of business insurance do app developers need?
Outside of tech E&O and cyber insurance coverage, there are a few other policies app development businesses should consider including in their insurance plan:
- Commercial property insurance covers your business property and equipment if it's damaged, lost, or stolen at your fixed business address. This policy is often bundled with general liability insurance in a business owner's policy (BOP), which can cost less than purchasing each policy separately. Should your machinery or equipment suffer a mechanical or electrical failure, equipment breakdown coverage would provide the funds to repair or replace the damaged equipment.
- Electronic data processing insurance (EDP) covers electronic devices such as computers, storage devices, and the data they contain. Also known as computer coverage or data processing coverage, EDP insurance can help protect against data loss during a power surge, fire, natural disaster, or similar event.
- Business income insurance, also known as business interruption coverage, offsets your lost net income when your business is forced to close because of a covered peril, such as property damage. These funds help you cover your normal operating expenses until you can resume business operations.
- Employment practices liability insurance (EPLI) is a type of management liability insurance that protects your business from employee lawsuits alleging discrimination, unfair termination, or other violations of their rights.
- Directors and officers insurance (D&O) covers legal costs if an officer or board member is sued over a decision they made on behalf of your company.
Are app development companies required to have insurance?
Depending on your industry and state, some policies aren't required by law. However, app development companies can protect their livelihoods and qualify for contracts and leases by carrying the right insurance coverage. For some app dev businesses, workers' compensation and commercial auto insurance may be required.
In addition to legal requirements, many clients require proof of insurance for your technology errors and omissions (E&O) insurance and cyber liability insurance policies before signing a contract. Without these policies in place, you may not qualify for larger projects or long-term contracts.
Typically, mobile application development startups will apply for general liability insurance first. This policy helps cover common business risks such as customer injuries, damage to a customer’s property, and advertising injuries.
Even small app dev businesses are vulnerable to the same exposures and lawsuits as larger businesses. This is another reason why you should consider application development business insurance.
In order to accept certain contracts, you may need to have a fidelity bond, which reimburses the client if one of your employees commits fraud, theft, or forgery.
Do app development businesses need professional liability insurance?
While application development businesses typically aren’t required by law to carry professional liability insurance, it should be a core part of your risk management strategy.
Professional liability insurance—also known as E&O coverage or professional indemnity insurance—protects your app development business if a client claims your work caused financial loss due to an error, omission, or professional negligence.
For app developers, E&O coverage is especially important because even small coding mistakes can have major consequences. Common claims include software bugs, failed app features, system outages, or performance issues that disrupt a client’s operations or lead to lost revenue. Intellectual property disputes are also a significant exposure, as clients may allege your application infringes on copyrighted code, proprietary technology, or patented functionality.
Professional liability insurance for app developers can also be bundled with cyber insurance into a technology professional liability policy, or tech E&O. Bundling these coverages is often more cost-effective than purchasing each policy separately and can help protect your business from both performance-related claims and data security incidents.
How can I save money on app developer business insurance?
There are many steps you can take to get affordable coverage that meets your app developer insurance needs.
Start by comparing free business insurance quotes from leading insurance companies through Insureon’s online application. If you're unsure what app or software development insurance solutions you need, our licensed insurance agents can help make sure you get the right, most affordable coverage.
Most small businesses can get insured and download a certificate of insurance (COI) within hours of applying for quotes.