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Why do software developers need business insurance?
A minor bug could be a huge liability if it affects your client's bottom line. Software developer insurance covers the cost of a lawsuit over a coding error, and can help your business recover from accidents and injuries.
Fast, easy, and affordable insurance for developers
Our fast online application helps you easily find and compare quotes from top-rated insurance providers.
Got questions? A licensed insurance agent will make sure you get coverage that matches your unique risks.
Which insurance policies do software developers and programmers need?
These policies cover the most common risks faced by software developers.
Technology errors and omissions insurance
Technology E&O, also called professional liability insurance, covers legal defense costs if a computer programmer makes a mistake. You can often add intellectual property and media liability coverage.
BEST FOR
- Substandard or late work
- Errors in software code
- Mistake that leads to client data breach
General liability insurance
This type of insurance covers basic risks, such as accidental damage to a client’s computer. Bundle with commercial property insurance for savings in a business owner’s policy (BOP).
BEST FOR
- Client property damage
- Client bodily injuries
- Copyright infringement and other advertising injuries
Cyber insurance
This policy helps software developers survive data breaches and cyberattacks by helping to pay for recovery expenses, notification of affected clients, and other financial losses.
BEST FOR
- Data recovery
- Client notification expenses
- Fraud monitoring costs
Fidelity bonds
This policy reimburses clients for theft by employees working for a software development company. It's also called an employee dishonesty bond.
BEST FOR
- Unlawful data access by an employee
- Illegal funds transfer by an employee
- Other employee theft or fraud
Workers’ compensation insurance
Most states require workers' comp for software development businesses that have employees. It also protects sole proprietors from work injury costs that health insurance might deny.
BEST FOR
- Employee medical expenses
- Disability benefits
- Employee injury lawsuits
Commercial auto insurance
Commercial auto insurance covers property damage, medical costs, and legal expenses in an accident involving a company vehicle. Most states require it for business-owned vehicles.
BEST FOR
- Auto accidents
- Vehicle theft
- Vandalism and other vehicle damage
Looking for different coverage? See more policies.
How much does insurance cost for software developers?
A software developer who works independently will pay less for insurance than a startup with several employees.
Factors that affect insurance premium costs include:
- Services offered, such as application development
- Business property and equipment
- Business income
- Types of small business insurance purchased
- Policy limits and deductibles
- Endorsements, such as IP insurance
How E&O insurance protects your business
View video transcript.
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 software developer and programmer insurance?
As a software engineer or developer, it's easy to get business insurance if you have your company information on hand. Our insurance application will ask for basic facts about your company, such as revenue and number of employees. You can buy a policy online and get a certificate of insurance 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 agents work with top-rated U.S. providers to find insurance coverage that fits your software development business, whether you work as an independent contractor or hire employees.
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Common questions about business insurance for software companies
Review answers to frequently asked questions (FAQs) about software contractor insurance and more.
Why is business insurance necessary for software developer companies?
Software development business owners might think their business is low-risk compared to others. Unfortunately, a frivolous lawsuit can still have a serious impact on your business, whether you're just starting your business or are well established.
Here’s a closer look at some key insurance products and why you should carry them:
- Technology errors and omissions insurance, sometimes called tech E&O, tech professional liability insurance, or software developer liability insurance, is a bundle of E&O with cyber insurance. This policy can help you with legal fees and court costs if a dissatisfied client sues you over your work performance or a third-party cyber incident. It covers the cost of customer notification, credit monitoring, legal fees, and fines.
- Commercial property insurance covers your business building and your equipment if it's damaged, lost, or stolen. This policy is often bundled with general liability insurance in a business owner's policy (BOP) to save money. 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 (EDP) insurance 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 your business income.
- 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.
Are software developers and programmers required to have insurance?
While several policies aren't required by law, software programming companies can protect their businesses and qualify for contracts and leases by carrying the right insurance coverage. For some businesses, workers' compensation and commercial auto insurance may be required.
Typically, software developers 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 software businesses are vulnerable to the same exposures and lawsuits as larger businesses. This is another reason why you should consider computer programmer insurance for your software business.
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 software developers need professional indemnity insurance?
Similar to other tech companies, software development and programming businesses aren't required by law to carry professional indemnity insurance. However, it should be a key component of your business's risk management plan.
Professional indemnity insurance, also called professional liability insurance or errors and omissions (E&O) insurance, protects you in the event a client files a lawsuit against your software business for an error, mistake, or professional negligence.
Specifically for technology businesses, you can bundle professional liability insurance for software development companies with cyber liability insurance into a technology professional liability policy, which is more commonly referred to as tech E&O. This would be a more affordable insurance option than purchasing the policies individually.
How can I save money on software development company insurance?
There are many steps you can take to get affordable coverage that meets your insurance needs.
Start by comparing free business insurance quotes from leading insurance companies through Insureon’s online application. If you're unsure what software development business insurance policies 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 within hours of applying for quotes.