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Business Insurance for Software Developers

Business Insurance for Software Developers

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In today’s modern, digital environment, most companies rely on some form of software to help run their businesses. As a software developer, your professional services and expertise are in high demand, but your work also comes with a number of risks and liabilities. It’s important to consider obtaining a comprehensive business insurance package to financially protect your company from risks ranging from client lawsuits to cyberattacks.

What insurance coverage do I need for my software development company?

While there are many types of coverage for companies to consider, these insurance policies are particularly important for software developers to consider:

Professional Liability Insurance

Software development can be incredibly complex, and the chance for error is high. When you develop software for clients, they expect the end result to meet their specifications. If you make a mistake in your work or the end product doesn’t function as planned, it could have a major financial impact on your clients. Clients who aren’t satisfied with your work could sue your business for damages and claim failures in services, advice, or professional work. Even if your company did nothing wrong, clients could still sue if they feel you were negligent in your work. Professional liability insurance can ensure that your business is financially protected, covering for legal and defense costs, settlements, and any judgments against your company.


Cyber Liability Insurance

As a software developer, your business heavily depends on digital systems and networks that could be vulnerable to cyberattacks. Even if you have strong cybersecurity protections, cybercriminals frequently develop new ways of exploiting security loopholes, and it’s impossible to be prepared for every new attack. If your systems or data are illegally accessed or stolen, you could be held liable, and the costs of recovering from a cyberattack are high. Cyber liability insurance can cover financial losses that result from data breaches, hacking, viruses, denial of service attacks, and other similar cyber events.


Commercial Property Insurance

If your company operates from owned or rented office space and relies on computers and other valuable property, it’s a good idea to invest in commercial property insurance. Commercial property insurance protects your company’s physical assets in the case of unforeseen accidents or natural disasters. In such events, commercial property insurance makes it easier to recover by reimbursing you for the cost of replacing damaged property. This type of insurance is particularly important for companies in the IT space that rely on expensive or hard-to-replace computer equipment. Commonly covered perils include fire, vandalism, windstorm, and water damage.


General Liability Insurance

General liability insurance can help protect you and your company from the financial burden of a lawsuit that claims personal injury, bodily injury, or accidental property damage. No matter how safely you conduct business, accidents happen. There’s always a chance that someone could be injured while visiting your offices, or that your employees might accidentally cause property damage while attending a meeting at another location. General liability helps to safeguard your business against bodily injury or property damage lawsuits from clients or third parties. It also covers personal and advertising injuries such as libel, slander, and copyright infringement.


Additional Coverage

Pricing and Quotes

Pricing for business insurance will vary based on the type of insurance coverage and the risk profile of your business. Insurers consider factors such as:

Businesses with higher risks will have higher premiums than those deemed lower risk. For example, a software development business with a history of frequent claims will face higher premiums. Premiums also rise as you increase the limits of insurance. Different insurance companies have different models for rating risks, so it is worth comparing pricing across different insurers.

In order to get an accurate estimate on pricing, it’s best to get a quote from a reputable insurance company. Below we’ve highlighted a few of our trusted partners who offer coverage for technology businesses:

ProviderGeneral LiabilityProfessional LiabilityBusiness Owner's Policy

Final Word

There are many major risks that could affect your software development company. Lawsuits brought by unhappy clients, physical damage caused by a disaster such as a fire, and cyberattacks are all risks that could have a serious impact on your business. Obtaining the right insurance coverage can give you confidence that your company will be protected in the event of a catastrophe, allowing you to focus on growing your business.

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