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Software Business Insurance for Developers, Engineers & Consultants

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software business insurance for developers

The software development industry includes all computer technology experts who alter, write, support, and test software of any kind. Software has become so crucial that most modern businesses rely on it to run. 

While running a software development business is lucrative, it has a wide range of risks. This is why you need software developer insurance that protects you against a wide range of risks. To enlighten you on the importance and benefits of this insurance policy, we will discuss what it covers and why your software development business needs it. 


Software Developer Liability Insurance

Unlike e-commerce insurance, which is broader, software developer liability insurance covers IT professionals and contractors operating within the software development industry. Whether you are customizing off-the-shelf software or building new apps, software engineer insurance protects you every step of the way. Software developer liability insurance policy covers you against a wide range of claims that could otherwise result in severe financial losses. 

Generally, clients have high expectations from software developers, given your knowledge and expertise. They expect you to use these skills to deliver high-quality products and on time. However, if you deliver a product that doesn't meet the standards required by your client, they might file a claim against you for losses and other damages. Without liability insurance for software developers, or software engineers insurance / software consultant insurance for consultants and engineers that carry liability coverage, you will have to defend yourself against these claims from your personal finances. This can be costly given the many expenses that come with a lawsuit.


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Software Business Insurance Scope

Just like web developer business insurance, software business insurance covers a wide range of claims. These claims cover various risks for software development companies. Here are some of them:

Dissatisfied Customers

Many people and sectors use software to manage their enterprises. As a result, the demand for software development is incredibly high. While that might be good for your software development business, it increases the risk of lawsuits. 

Any outage, for instance, could result in your client losing money. Therefore, they could file a claim against you for damages. Furthermore, if you fail to meet your deadline and inconvenience your client, they have the right to sue your software development business for damages. Software engineer insurance covers against such claims and protects your business against possible losses. 

Cyberattacks

In modern technology, cybercrime is on a significant rise. Most hackers target software development companies because they handle sensitive information that could be valuable. Cyberattacks and data breaches could lead to useful information, such as credit card and social security numbers being compromised.

This leaves your business open to severe litigation. Furthermore, damage caused by cybercrime to third-party services or software could result in a lawsuit. This is why you need software developer insurance that covers such claims. 

There is extreme competition in the software development industry. Therefore, with many software development companies offering similar services and focusing on the same demographics, avoiding intellectual and copyright infringement can be challenging. 

Even when you are doing honest work and are not infringing on anything, competitors could still claim an infringement. Therefore, having insurance for software companies protects you against such claims and helps maintain your company's good reputation. 

Property Damage

When your software development business is based in a commercial building, there are chances that your work equipment could be damaged by vandalism, weather events, fires, or burglary. You also can't rule out the possibility of an employee accidentally spilling coffee on your server and damaging it. 

All these events or mishaps will result in the need for equipment repair or replacement. Unfortunately, software development equipment is costly, and getting that money out of your pocket could affect your business significantly. This is why you need software business insurance that protects you against such cases. 

Theft

Employees have access to sensitive and valuable customer data in the software development business, making it tempting to steal. Besides, given that software development is based online, many hackers look for ways to bypass security systems and steal data, cash, and other valuables. In case of theft, your clients will sue you for the losses incurred. Without software engineer insurance in place, you will have to defend yourself against these claims using money from your pocket. This could result in severe financial losses.



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With the significant growth experienced in the software development business, the complexity and number of insurance coverage required will change. Whether you are an independent software developer with a few employees or an established software development business, here are some of the recommended insurance policies you should consider.

Commercial General Liability Insurance

It goes without saying that any business owner should have commercial general liability insurance. This is an essential insurance policy that protects your business from property damage and third-party bodily injury. For instance, this insurance policy covers their medical expenses when a client visits your office, accidentally stumbles on wires, and suffers an injury. Besides, if the client decides to file a claim against your business, general liability insurance covers all the legal expenses. Some of the other areas covered under this insurance policy include slander, libel, defamation, and invasion of privacy. Therefore, it is a good idea for your software development business to get this insurance policy.

Technology Errors & Omissions Insurance

This is one of the most vital insurance policies you can get for your software development business. Technology errors and omissions insurance covers your business if the professional services you offer cause losses to your customer. For instance, you might develop software that fails to meet the standards and results in severe financial losses for your client. In that case, the client might file a claim against you for losses and related damages. 

This insurance policy also addresses claims arising from failure to deliver protection on time. Furthermore, it addresses errors in the system or codes you develop for your client. In case of such errors, your client has the right to sue you for damages. This is why you need a solid insurance policy that protects your business. Operating without software engineer insurance puts your business at risk of serious financial losses. You will have to cater for all the expenses and pay off court settlements. This could leave your business in financial limbo. 

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Software Business Insurance Cost

the average software business insurance cost is $33 per month or $396 per year for a $1m general liability coverage for software developers, engineers and consultants as it is considered a low risk business to insure. Costs vary depending on a variety of factors like years in business, business size, location, annual income, history, etc.

Here's a breakdown of the costs from some of the best and cheapest software business insurance companies:

CompanyMonthlyYearlyBest for
Coverwallet$19$225Online software business insurance quote comparison
Thimble$26$300Freelance software business insurance by the hour
NEXT$29$348Fastest software business insurance policy online
Hiscox$32$384Bigger software companies


Best Software Business Insurance Companies

Please find the best and cheapest software business insurance providers reviewed below.

Coverwallet Software Business Insurance

Coverwallet provides a fast way to get software business insurance to its clients. Clients are offered the lowest price when they buy software publishers' insurance online. Their policies are available as low as $19 per month.

Coverwallet provides coverage claims from body injuries, property damage, personal injuries, as well as, lost business income, and equipment breakdown. They offer various policies like Business Owners' Policy (BOP), professional liability, General Liability (GL), and Cyber Liability.

Pros

  • Personalized customer service including live chat with agents
  • Provides instant proof of coverage
  • Instant quotes online
  • Top carriers for software business
  • Affordable rates available

Cons

  • A digital marketplace (agency), if that's considered a minus...


Thimble Software Business Insurance

Thimble provides general liability and professional liability insurance for all software developers. It provides protection for third-party property damage, claims of errors or omissions, negligence, and even bad advice. Thimble's policy details are based on four factors for clients: ZIP code, crew size, coverage length, and limit. While these factors are present, it provides clients the freedom and flexibility to shop any time of the day. 

Pros

  • Excellent customer service
  • Provides on-demand policies online from as low as $8 for 3 hrs
  • Provides software business insurance quotes online instantly
  • Affordable
  • Excellent choice for freelancers and part timers

Cons

  • Newcomer

Compare Software Business Insurance Quotes Online

Get all the best quotes from leading providers in a click of a button!

In partnership with:

Identity logo

In partnership with:

Coverwallet logo

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