Software Development Insurance

Software Development Insurance

Essential protection for software developers shielding them from third-party liability, cybersecurity, and other risks.

Zensurance - Software Developer

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Software Development Professional

Insurance for software developers

Technology and software development is big business in Canada. Data shows revenue in the Canadian software market is projected to reach US$17 billion in 2022, with enterprise software leading the charge followed by application development, system infrastructure software, and productivity software.

 From website designers, coders, and computer programmers to data scientists and embedded system and video game developers, software development insurance is designed to safeguard technology professionals from a broad range of risks online and offline.

Software developer insurance is a customized policy featuring multiple coverages to address the wide range of exposures independent devs and development teams face. It provides software developers with financial support if they are subjected to third-party liability claims or lawsuits, cyber-attacks and data breaches, and other perils.

An extensive, complete software developer insurance policy typically includes the following coverages:

  • Errors and Omissions (E&O) Insurance: As its name suggests, E&O insurance is designed to provide you with financial support if you face allegations or lawsuits related to errors, omissions, negligence, and failing to deliver a service as promised. Also called professional liability insurance, it includes coverage for products you developed if they fail, advice you provide to your clients, and media and advertising if one of your clients is sued for libel, slander, or defamation resulting from your services.
  • Cyber Liability Insurance: A must-have coverage in your software developer insurance policy is cyber liability protection. It covers you for damage or loss related to data breaches and cybercrime if you suffer a cyber-attack and your clients’ confidential information is compromised.
  • Commercial General Liability (CGL) Insurance: CGL protects you from the risk of third-party bodily injury or property damage claims and lawsuits arising from your services or regular business operations that occur on your premises. Commonly called slip-and-fall insurance, CGL is designed to provide financial support if someone is injured on your property and demands reimbursement for their medical expenses, for example.
  • Commercial Property Insurance: Commercial property insurance protects your physical office or workspace, contents including electronics and furniture, and inventory if damaged, lost, or destroyed by fire, flood, a natural disaster, vandalism, or theft. It may also include business interruption insurance to cover your business’s overhead costs like rent and utility bills if you are forced to cease operations while repairs to your workspace are underway because of an insurable loss.

Insurance for software developers starts at around $600 for a CGL policy with a $1 million limit. However, insurance providers consider the following factors when determining how much your policy will cost: 

  • The type of work you do and services you provide
  • Your location
  • The types of clients you have
  • Your training and certifications
  • Years of experience
  • If you’re a business owner, how many employees are on your team
  • Your annual and projected revenue
  • Your insurance claim history

A broad range of technology and software development professionals and small businesses should protect their assets and reputations with a comprehensive software development insurance policy, including: 

  • Backend developers
  • Big data developers
  • CRM developers
  • Data scientists
  • Desktop developers
  • Dev ops developers
  • Embedded developers
  • Enterprise software developers
  • Frontend developers
  • Full-stack developers
  • Language developers
  • Mobile app developers
  • Operating systems developers
  • Software consultants
  • Video game developers
  • Web developers

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Common claims scenarios

software ware developer working on computer

Problem: You are developing an artificial intelligence (AI) shopping assistant system for a large e-commerce website. After completing and launching the new system, it’s discovered the application lacks important features, resulting in visitors to your clients’ site to abandon their shopping carts in record numbers. The client sues you for software errors and loss of income.

Outcome: Your E&O coverage may cover your legal defence costs and the monetary judgment against you ordered by the court.

client injured on stair steps

Problem: A client visits your company’s office for a consultation on their mobile app development but falls and injures themselves on the way into the building. They require medical attention and subsequently threaten you with a lawsuit for damages.

Outcome: Your CGL coverage may pay for the injured client’s medical expenses and rehabilitation fees, as well as the compensation awarded to them by the court or settlement reached out of court.

cyber hacker

Problem: After developing an API integration for a client’s software, a cybercriminal finds security gaps and installs backdoor access. They launch a ransomware attack by locking your client’s database and stealing personal information, including names, addresses, and credit card details.

Outcome: Your cyber liability coverage may pay to repair and restore your client’s data and software systems. If the client sues you, it may also provide you with financial support to defend yourself in court.

Frequently asked questions

Does a software developer insurance policy include protection for my computing systems and related technology hardware?

If your policy includes commercial property coverage, your computers and other business contents are covered for damage or loss related to fire, flood, a natural disaster, theft, or vandalism.

What is the right coverage limit for my software developer insurance policy?

It depends. Whether you’re a self-employed or independent software developer who has many clients, an employee of a tech firm, or the owner of a mobile app development company, the policy limit you require should mirror the potential risks you face. In general, there are two options: a policy with $1 million or $2 million limits. Most software developers choose the $2 million limit to ensure they’re covered. Have a conversation with a Zensurance licensed broker about your concerns and make an informed decision.

I work for a technology company. Why do I need my own software developer insurance policy?

All software developers and technology professionals should safeguard their livelihoods by purchasing insurance. Although you work for a tech company that has insurance, their policy may not cover you for something such as errors and omissions, for instance. In other words, you may be leaving yourself exposed to liability without your own policy.

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Don’t allow a vulnerability or security hole in your business to go unaddressed. Protect your reputation, assets, and finances with a customized software developer insurance policy from Zensurance.

 Fill out an online application and get a free quote in a few clicks. Our licensed brokers will partner with you and advise you on the coverages you need to minimize your risks and ensure you’ve got a backup if something goes wrong. Let us shop our partner network of more than 50 insurance providers to get the policy you need at the best price available.