Here are three types of business insurance available to app developers:

• General liability insurance
• Professional liability insurance
• Workers compensation insurance

Each type of policy covers different scenarios, but all insurance offers the benefit that:

• It can protect your business from certain claims.
• It can cover damages caused by your negligence.
• Proof of insurance can help clients feel good about your work.
• It may be required where you’re located.

What Types of Insurance Do App Developers Need?

You stay up to date with changes in the tech world, but you feel a little lost when you begin to compare insurance. If that sounds familiar, you’ve made it to the right place. We’re going to break down the three types of app developer insurance to consider, along with what they can cover. Let’s review.

Professional Liability Insurance

Your work can have a serious impact on your customers’ business. While that means you thoroughly help each client, it also can make you liable. As an app developer, your client could potentially sue you for negligence.

In these scenarios, professional liability insurance can help.

This type of policy protects your business against a negligence claim. A client can sue you for negligence and damages, even if you don’t agree with the claim. Professional liability insurance covers you if a client claims that you, your employees, or your business were negligent.

“Negligence” may seem abstract, so let’s look at a scenario. Imagine you’ve created an app for an eCommerce client, and they love your work. All seems well at first, but then end users begin to realize the app is charging them twice for purchases, and now they’re suing your client’s company.

Since you created the app, and therefore the bug, your client could possibly sue you.

Perhaps you disagree with the claim, and you get legal representation to fight the case. You may or may not have to pay damages in the end, but you’ll definitely have your own legal bills. Without insurance, all of these fees would come directly out of your pocket.

However, a professional liability insurance policy could help offset those costs, saving you thousands of dollars.

Let’s review the scenarios that professional liability insurance usually covers:

• Legal defense costs
• Omissions or alleged omissions
• Negligence or alleged negligence
• Claims and damages
• And more

Having professional liability insurance does not usually protect you from:

• Property damage
• Intentional acts and omissions
• Bodily injury
• Medical expenses
• And more

General Liability Insurance

Whereas professional liability covers specific scenarios, general liability insurance is a bit broader. This type of policy covers bodily injury, property damage, and third-party accidents. For reference, “third party” is insurance lingo for your clients or vendors.

As an app developer, you could encounter accidents when you and your clients are visiting each other’s offices. For example, if you were to go to a client’s office to present your final product and you crashed into their freshly cleaned glass doors, you could shatter the door and end up with the bill to fix the damages.

If you had a general liability policy, your plan could likely help cover the costs. Without coverage, you’d be stuck with an annoyed client and a big bill.

Think you could handle small accident damages? The average claim for property damage or accidents in small businesses is $30,000, so you’d better have a healthy business savings account if you plan to weather the storm without insurance.

So what does general liability insurance typically cover in your app development business? Here’s a recap:

• Third-party property damage (aka clients or vendors)
• Bodily injury
• Medical expenses
• Personal and advertising injury
• And more

General liability insurance does not cover:

• Personal property damage
• Professional services
• Employee injury and workers compensation

Workers Compensation Insurance

While the previous two policies could be useful for any app developer, this third category is reserved for businesses with employees. Most states require you to carry workers compensation insurance if you have part-time, full-time, or even temporary employees.

This type of insurance can cover medical bills, lost wages, and legal fees associated with an employee who gets sick or hurt on the job.

If you want to learn which requirements apply to you, without having to sort through government websites, simply answer a few questions for a personalized quote.

The average cost of a workers comp claim is $40,051, which means that the price of a single accident makes workers compensation insurance worth having.

Workers compensation insurance for app developers may cover:

• Medical payments
• Lost wages
• Rehabilitation expenses
• Death benefits

Why Should You Get an App Developer Insurance Policy?

You know that when you’re designing a new app, you need to create code that can evolve with the business to handle new-edge cases. Just as you try to future-proof your app, you can use business insurance to protect against potential unknowns.

No matter how diligent you are with your work, accidents or negligence claims can occur. Sometimes, bugs just happen. In fact, 43% of small business owners polled reported being threatened with or involved in a civil lawsuit. You don’t sit around and worry about what could go wrong with a new code you developed, though, do you?

Of course not! Instead, you take proactive measures at the beginning of the project to minimize the chance for issues, and then handle them as they come along. You can take the same approach in your business by thinking ahead and getting insured now so that dealing with accidents in the future isn’t as big of a headache.

The average costs that small business owners are exposed to without insurance include:

• $30,000 for property damage or accident claims
• $50,000 for reputational harm claims (e.g., slander or libel)
• $20,000 for a client slip-and-fall case

Not to mention that you could face negligence claims (and their resulting legal fees), whether or not you were negligible.

Insurance isn’t all about scary scenarios, though. Having an app developer insurance policy could help you rent office space or earn the trust of potential clients and employees. Also, your monthly costs are related to the size of your business, so you don’t need to overpay for coverage you don’t need.

Getting business insurance is a small step you can take to make a big impact on your company’s longevity.

App Developer Insurance FAQs

Why Choose Simply Business?

Paying attention to details and being thorough in your work has helped you grow your business. We’re here to help you review and choose the insurance policy option that’s right for you.

Simply Business is an online insurance platform that makes it easy to compare quotes from top insurers to find your perfect coverage. We’re trusted by thousands of customers to protect their businesses, making us one of the fastest-growing online providers of small business insurance.

What sets Simply Business apart?

• We’re fast and affordable. Getting a quote takes only a few minutes, and you’ll be able to review free quotes right away.

• We’re flexible. Every app developer’s business is unique, and it evolves. We’re here for your first policy or increased coverage as your business grows.

• We recognize you’re unique. You won’t find one-size-fits-all policies here. Our quote process helps find coverage options that are crafted for you.

You’ve worked hard to build your app development business. Now you can choose the best coverage to protect it.

This content is intended to be used for informational purposes only. It is not intended to provide legal, tax, accounting, investment, or any other form of professional advice.