Software Developer / Programmer Insurance

As a software engineer, web developer, or other technology-focused business, 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:

1. Complete a free online application.
2. Compare insurance quotes and choose policies.
3. 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.

While most types of business insurance aren’t required by law, clients often require software developers to carry coverage before signing a contract.

For startups, requirements may be relatively simple—such as general liability insurance to cover customer injuries, third-party property damage, or advertising injuries. However, as you take on larger clients or more complex projects, expectations tend to increase.

Enterprise clients, in particular, often require higher coverage limits and proof of additional policies, such as technology errors and omissions (E&O) insurance or cyber insurance.

Even small software development businesses face the same risks as larger firms, and having insurance in place can make your business more credible and competitive when bidding for projects.

In some cases, clients may also require a fidelity bond, which reimburses them if an employee commits fraud, theft, or forgery.

Having the right coverage not only protects your business, it can also open the door to more contracts and growth opportunities.

Freelance software developers and independent contractors face many of the same risks as larger development firms, but without the protection of an employer’s insurance coverage.

When you work full-time for a company, its insurance policies typically cover claims related to your work. As a freelancer, you’re responsible for your own mistakes, missed deadlines, and client disputes.

For example, a bug in your code could cause a client’s system to fail or lead to lost revenue, resulting in a claim against you. You could also face disputes over unmet expectations, project delays, or contract issues. In addition, handling client data or integrating third-party tools can expose you to security and system-related risks.

Business insurance helps protect against these types of financial losses and legal claims. Even if it’s not required, having coverage can safeguard your personal assets and make you a more credible choice when working with clients.

Similar to other tech companies, software development and programming businesses aren't required by law to carry professional liability insurance. However, it should be a key component of your business's risk management plan.

Professional liability coverage, also called professional indemnity 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.

For example, a software bug or faulty code deployment could cause a client’s system to crash, disrupt operations, or lead to downtime or data loss. In these situations, clients may seek compensation for lost revenue, recovery costs, and reputational damage.

Missed deliverables and unmet expectations are also common risks. If a project runs behind schedule or doesn’t meet agreed-upon requirements, a client could file a claim for financial losses tied to delays or performance issues.

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.

There are also intellectual property and licensing risks to consider. Using open-source code without complying with licensing terms, or unintentionally infringing on another party’s software, can result in costly legal disputes.

Developers can face claims related to copyright infringement, trademark violations, or misappropriation of proprietary code.

For example, reusing code from a previous employer, incorporating third-party libraries without proper attribution, or building software that closely resembles a competitor’s product can all raise legal concerns. Even unintentional mistakes—like misunderstanding an open-source license—can lead to cease-and-desist orders, fines, or lawsuits.

Because these risks aren’t always obvious during development, it’s important for software professionals and businesses to follow proper licensing practices and document their work to help reduce potential exposure.

Software developers who work in higher-risk industries—such as healthcare, finance, or e-commerce—often face stricter requirements and higher premiums. That’s because these sectors handle sensitive data, process financial transactions, or support mission-critical systems, which increases the likelihood and cost of potential claims.

For example, a developer building software for a fintech platform or healthcare provider may need higher coverage limits or additional protections, due to the increased risk of data breaches and regulatory exposure. 

To find affordable coverage, it’s important to compare quotes from multiple insurers. With Insureon, you can get free quotes from leading insurance companies through a simple online application. If you’re unsure which policies you need, a licensed insurance agent can help you choose the right coverage for your business and budget.

Most small businesses can get insured and download a certificate of insurance within hours of applying.