Best Software Developer Insurance

The Hartford not only earned our top spot as the best software development business insurer, but it also has the cheapest rates in the industry. 

The company also includes coverage in its standard policies to protect anyone in the technology sector from unique risks and has specialized plan selections. We recommend looking into NEXT Insurance, biBERK, Simply Business and Nationwide for coverage for your business.

*We based all scores on a software business with two employees across professional liability, general liability, workers' comp and BOP policies.

The Hartford leads software business insurance affordability at $37 monthly on average, offering the cheapest BOP and professional liability coverage. Simply Business beats it slightly for general liability insurance, while NEXT provides marginally more affordable workers' comp coverage.

With rates on average of $14 per month, Simply Business leads with the cheapest general liability insurance for software companies at just $14 monthly. This beats the industry average of $27 by $13 monthly, which is almost half the cost of the usual policy.

NEXT has the most affordable average rates for workers comp for software firms at $25 per month or $298 per year. However, this is only marginal and The Hartford, Thimble, Simply Business and Progressive Commercial offer some of the lowest rates as well for the industry.

The Hartford and NEXT provide the most affordable professional liability insurance options for software development organizations, with average monthly rates of $85 and $87, respectively. Compared to the industry average of $95, you can save around $10 per month with The Hartford.

Software companies looking for business owner's policy coverage will find The Hartford offers the cheapest option at $255 annually. This rate is only $2 cheaper than Simply Business however and many of the other providers shown can also be affordable insurers for your business.

In general, software business insurance costs are the following for the four most popular coverage types:

• General Liability: $27 on average per month, ranging from $23 to $33, depending on the state
• Workers' Comp: $26 on average per month, ranging from $23 to $31, depending on the state
• Professional Liability (E&O): $95 on average per month, ranging from $82 to $110, depending on the state
• BOP Insurance: $30 on average per month, ranging from $26 to $36, depending on the state

The most critical insurance coverages for software developers and development companies include professional liability, general liability, and cyber liability insurance. 

Depending on your business structure and location, workers' compensation, commercial property and business interruption insurance may also be required.

Here's why these coverages are essential and the recommended coverage amounts for the average software development firm:

• General liability insurance: Covers third-party claims for bodily injury and property damage occurring at your premises or during business operations. While less critical for software companies than other businesses, it's often required for office leases and client contracts. $1 million to $2 million per occurrence with $2 to $3 million aggregate is standard.
• Cyber Liability: Important for software companies handling client data, payment information, or personal information. Covers data breaches, ransomware attacks, system failures, and regulatory fines. Also includes notification costs and credit monitoring for affected parties. A minimum of $1 million coverage is recommended, with $5+ million for companies handling sensitive data.
• Workers' comp: Required by law if you have employees. Covers medical costs and lost wages for work-related injuries or illnesses. Even for desk-based software work, coverage is needed for repetitive strain injuries, workplace accidents, or mental health claims related to work stress.
• Professional liability insurance (E&O): Protects against claims of professional negligence, errors in code, missed deadlines, or failure to deliver promised functionality. This is the most critical coverage for software developers as it covers lawsuits claiming your work caused financial losses to clients. We recommend $1 million to $2 million per claim with $2 million to $5 million aggregate coverage, depending on the size of client deals.
• Business Interruption: Covers lost income and ongoing expenses if your business operations are interrupted by covered events like cyber attacks, equipment failure, or natural disasters. It is critical for maintaining cash flow during system outages or office relocations. Coverage should equal 6-12 months of operating expenses and lost revenue.
• Commercial Property: This policy protects business equipment, computers, servers, office furniture, and leased office space against theft, fire, vandalism and natural disasters. It is important if you maintain physical offices or expensive development equipment. Coverage should reflect the replacement cost of all business property and equipment, but somewhere around $50,000-$100,000 will cover what you need.

Here's a step-by-step method for finding the best and cheapest business insurance for your software company.

The Hartford is the best insurer for software business insurance and offers the cheapest option overall. We also recommend getting quotes from NEXT, biBerk and Simply Business. For the best deal, consult agents and similar businesses, research costs and companies, and compare multiple quotes.

We answer frequently asked questions about software company insurance:

We selected the best business insurer for software companies based on the following criteria:

• Affordability (50% of score): The lower a company's costs compared to the competition based on our base profile for four core coverage types, the better the company performs.
• Customer service (30% of score): We scored providers on overall customer satisfaction using industry studies, customer review forum ratings and public forum sentiment analysis from sites like Reddit.
• Coverage (15% of score): We scored business insurance providers for this category based on the flexibility, payment and actual coverage options.
• Financial stability (5% of score): Using financial stability industry ratings from companies like AM Best and Moody's, we created an overall rating to judge how likely companies are to pay out claims compared to the competition.

All pricing in this article is based on the following base profile to represent the vast majority of small businesses in all states:

• Three-person business with two employees
• Coverage: $1 million per occurrence and $2 million total per year for all but BOP, which includes the same coverage plus $5,000 of business property coverage
• $150,000 in payroll
• $300,000 annual revenue