As a web developer, you play an important role in building and maintaining your clients’ websites and web applications. Your work is in high demand and can have a significant impact on a client’s business and revenue. With such impactful work, though, comes a number of risks and potential areas of liability. If the services you provide don’t meet your client’s expectations, or if errors in code lead to glitches or security loopholes, your clients could suffer financial losses and sue you as a result. Moreover, as with many businesses, your company may be exposed to more common risks, including natural disasters, accidents, or cyberattacks.

It’s important to consider business insurance policies that will protect your company from the risks you face in your work. Dealing with incidents such as a lawsuit or cyberattack can financially devastate many companies or even bankrupt them. Having the right insurance in place can give your company the financial security it needs to continue operating in the event of a catastrophe.

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

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

Professional Liability Insurance

Web development work can be incredibly complex, and no matter how meticulous your work is, there’s always a chance that an error could occur. Since many companies rely heavily on their web properties and applications, clients have high expectations when they hire a company to provide web development services. Mistakes in your work could have a major financial impact on your clients, and if they aren’t satisfied with your work, they could sue your business for 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 financially protect your business by covering legal and defense costs, settlements, and any judgments against your company.

Example:

• You develop an e-commerce web application for an online clothing company. Unfortunately, an error in your code means that customers are unable to access their online shopping carts. Customers cannot place online orders for several days until the problem is fixed, and your client loses money and receives hundreds of complaints. They sue your company for damages. Your insurer would cover the lawsuit and any damages or settlements.

Cyber Liability Insurance

As a web developer, you rely heavily on computers, servers, and networks, and you’re likely aware of the threat that hackers and cybercriminals could pose to your business. Even if you have robust cybersecurity protections, cybercriminals frequently develop new ways of illegally accessing systems, 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.

Example:

• A virus spreads through your company’s computer network, deleting or corrupting important data and delaying several major web development projects. Your insurer will pay for the costs of hiring consultants to remove the virus and restore data. It will also reimburse you for income you lost due to the delays.

Commercial Property Insurance

If your company operates from an office and relies on valuable technological equipment such as computers and servers, commercial property insurance can protect the value of your business property. If an unexpected disaster damages or destroys your building or equipment, recovering can be difficult and expensive. Commercial property insurance can help provide funds to replace or repair damaged business property. Commonly covered perils include windstorms, hail, fire, vandalism, and water damage.

Commercial property insurance covers the following:

• Buildings belonging to or leased by your company
• Contents of the building, including furniture, computer equipment, and artwork
• Property of others while it is under your care, custody, or control

Example:

• A faulty toaster starts an electrical fire in your office kitchen. The fire damages the kitchen wall as well as furniture and other equipment. Your insurer will pay for repairs to the building and to replace the equipment.

General Liability Insurance

General liability insurance protects your company from claims of third-party bodily injury, property damage, and personal injury. This is a particularly important type of coverage to consider if your company holds meetings with clients at your offices, meets with clients at their offices or other locations, or has outside workers such as delivery people on your property. There is always a chance that a non-employee could be injured or someone else’s property could be damaged in the course of your work. General liability insurance also includes a personal and advertising injury component, which provides coverage for a number of risks, including libel, slander, and copyright infringement.

Examples:

• Bodily injury: A technician comes to your offices to perform a yearly inspection of the fire sprinkler system. She trips over a misplaced cable and falls, fracturing her wrist. Your general liability insurance would cover medical costs and legal fees if the technician sues.
• Property damage: Your employees visit a client’s office to discuss a website you are developing for them. One of your employees trips and knocks over an expensive vase, shattering it. Your general liability insurance would pay for the damages.
• Personal and advertising injury: Your company posts a regular blog about issues in the web development field. One of the blog posts contains false statements about a competitor. The competitor sues your company for libel. Your general liability insurance would pay for the lawsuit and any settlements.

Additional Coverage

• A business owner’s policy combines general liability, property, business income, and extra expense coverage into a single package. This type of insurance can help small and midsize companies save money on premiums while obtaining a wide range of coverage.
• Business income coverage will reimburse you for lost income and operating expenses if your business is unable to operate due to a covered reason, such as fire, storm damage, or other property damage.
• Employment practices liability insurance protects your business against lawsuits by employees who accuse your business of wrongful treatment, including discrimination, harassment, or other employment-related issues.
• Workers’ compensation insurance is legally required for companies with employees in most states. It covers employees’ medical expenses and lost income if they are injured while working. For IT companies, repetitive strain injuries are common sources of workers’ compensation claims.

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:

• Business size
• Industry
• Location
• Number of employees
• Claims history

Businesses with higher risks will have higher premiums than those deemed lower risk. For example, a web 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:

Provider	General Liability	Professional Liability	Business Owner's Policy
Embroker	??	??	??
CoverageSmith	??	??	??
CoverWallet	??	??	??
Hiscox	??	??	??
Thimble	??	??	??

Final Word

As you review what types of business insurance to purchase, it’s important to consider the various major risks for which your business could be held liable. Business insurance can help your company cope with unexpected disasters, whether it’s a fire or serious storm that damages your offices, a lawsuit brought by a dissatisfied client, or a client injury that happens on your property. With the right insurance coverage, you and your clients will feel confident in the knowledge that your company would be able to cope with any major incidents that arise.