Software Developer / Programmer Insurance
Software Development
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How much does software developer business insurance cost?

Small business owners can save money on commercial insurance by comparing quotes from different providers with Insureon. Software developer insurance costs depend on the policy limits, deductibles, and factors such as your business's location and its claims history.

Top software developer insurance policies and their cost

Here are the top insurance policies purchased by software developers and their average monthly costs:

Our figures are sourced from the median cost of policies for software developers who apply for quotes with Insureon. The median offers a better estimate of what your business is likely to pay because it excludes outlier high and low premiums.

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Technology errors and omissions insurance

Software developers pay an average of $83 per month, or $990 annually, for tech E&O insurance. This policy bundles errors and omissions insurance with cyber insurance at a lower cost than buying the policies separately.

Errors and omissions insurance, also known as professional liability insurance, provides financial protection against claims of professional negligence. For example, your software might cause a client's system to crash at a critical moment, which could result in a lawsuit and costly attorney's fees.

Tech E&O adds third-party cyber insurance to this coverage, which extends protection in case your mistake or oversight leads to a data breach or cyberattack at a client's business.

This is the average E&O policy for software developers who buy from Insureon:

Insurance premium: $83 per month
Policy limits: $1 million per occurrence; $1 million aggregate
Deductible: $2,500

Errors and omissions insurance costs for software developers depend on factors such as the coverage limits you choose, the size of your business, and the type of software you work on.

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Cyber insurance

Software development companies and computer programmers pay an average of $150 per month, or $1,799 per year, for cyber insurance. This policy is vital for businesses that store customer information, such as credit card numbers, Social Security numbers, and email addresses.

Cyber insurance covers the cost of complying with your state's data breach laws after a cyber incident. It can pay for legal fees, customer notification costs, and data recovery efforts related to a data breach or cyberattack. You may also see this policy referred to as cyber liability insurance or cybersecurity insurance.

The cost of cyber insurance for software developers primarily depends on the amount of personal information handled by your company.

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General liability insurance

Software developers pay an average of $30 per month, or $365 per year, for general liability insurance.

A general liability policy helps pay for legal costs from accidents that harm a customer or damage a customer’s property, along with copyright infringement and other advertising injuries. For example, it would cover costs if a client tripped over a power cable in your office and suffered an injury.

This is the average general liability coverage for software development businesses that buy from Insureon:

Premium: $30 per month
Policy limits: $1 million per occurrence; $2 million aggregate
Deductible: $500

Insureon’s licensed agents typically recommend a business owner’s policy (BOP), which combines general liability insurance with commercial property insurance at a discount to protect your computers, backup drives, and other business property.

For software developers, the average premium for a business owner's policy is $47 per month or $569 per year. You can also add business interruption insurance to protect against financial losses from a forced closure due to a fire or storm.

The cost of general liability insurance depends on factors such as the coverage limits you choose, the size of your business, the amount of foot traffic, and any subcontractors or additional insured endorsements. Learn more about how your premium is calculated.

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Fidelity bonds

The average cost of a fidelity bond is $89 per month for software developers, or $1,067 annually. Some clients, especially in the financial services industry, may require a bond before they will sign a contract with your software development business.

Fidelity bonds reimburse your client if one of your employees commits fraud, theft, or forgery, including illegal electronic funds transfer. This amount must be paid back to the company that issued the bond.

The cost of a fidelity bond is typically a small percentage of the bond amount.

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Workers' compensation insurance

Software developers and businesses pay an average of $34 per month, or $411 annually, for workers' compensation insurance.

This policy covers medical expenses and disability benefits when you or an employee suffers a work-related injury or illness. For example, a developer could suffer from carpal tunnel syndrome after years of working at a keyboard, or injure their back lifting a heavy monitor.

Software development companies that have employees typically must purchase workers' comp to comply with state requirements and avoid penalties. It's also recommended for sole proprietors, as health insurance plans can deny claims for injuries related to your job.

Most policies include employer's liability insurance, which covers legal defense costs related to workplace injuries.

The cost of workers' comp depends on the number of employees and their occupational risks, among other factors.

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Commercial auto insurance

Tech companies pay an average of $198 per month, or $2,375 per year, for commercial auto insurance. This policy can pay for property damage and bodily injuries in an accident involving a company vehicle. It can also cover vehicle theft, vandalism, and weather damage.

Most states require this type of insurance for vehicles owned by a technology company. For personal, rented, and leased vehicles used for work purposes, look to hired and non-owned auto insurance (HNOA) instead.

The cost of commercial car insurance depends on several factors, including the policy limits you choose, coverage options, the value of your vehicle, and the driving records of anyone permitted to drive.

How do I get affordable software developer business insurance?

Insureon can help software developers and startups find affordable insurance coverage and peace of mind in three easy steps:

  1. Fill out a free online application with details about your business.
  2. Compare custom quotes from top-rated U.S. insurance providers.
  3. Select a policy and pay the premium to begin coverage.

You can consult a licensed insurance agent for questions about your risks, state insurance requirements, and the best coverage for your business needs. Once you've bought a policy, you can download a certificate of insurance for proof of coverage. Most small business owners can get insured within 24 hours of applying for quotes.

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Updated: November 8, 2023
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