Liability Insurance for Software Developers:

• Professional liability insurance
• General liability insurance
• Workers compensation insurance (if you have employees)

Benefits:

The right business insurance policy can help:

• Protect you financially if you experience certain claims.
• Cover the costs of damages caused by negligence.
• Demonstrate a level of credibility to clients.
• Meet legal requirements (depending on where you live).

What Type of Insurance Do I Need for My Freelance Software Developer Business?

Whether you just started working on your own or you’ve been at it a while, you need affordable coverage. As a coder, you may not realize that your business is vulnerable—but it is. Software code can be incredibly powerful. Just one mistake can leave an organization at risk for security issues, often costing thousands of dollars.

You don’t want to be left with a lawsuit on your hands. To help protect your business, we recommend these policies:

Professional Liability Insurance

Let’s face it, you’re human. Even the best software developer can make an honest mistake. That said, one error can also lead to a lawsuit. What if a client accuses you of writing code that causes a security breach? Imagine the financial consequences, especially if the client is in healthcare or financial services.

Even if it wasn’t your fault, you may need to defend yourself by hiring a lawyer. That’s why professional liability insurance (PL) is so important for software developers. It can help protect you financially if you get sued for negligence in your services. If you have someone working for you, it can help cover them too.

Here’s an example. Imagine you’re up late writing code for a healthcare client. You’re tired and make a mistake. Unfortunately, your error leaves a backdoor into the software wide open. A few months after delivering the code, your client accuses you of negligence and sues for damages.

If you have professional liability insurance, your policy can help cover the costs of hiring a lawyer, litigation fees, and damages(up to your policy’s limit. With coverage, you’re less likely to dip into your personal assets and more likely to get back on your feet financially. The truth is, a lawsuit can happen to anyone. You want to be prepared if it happens to you.

Professional liability insurance can help cover the costs associated with:

• Negligence or alleged negligence
• Hiring a lawyer to defend yourself
• Omissions or alleged omissions
• Claims and damages
• And more

However, PL insurance usually doesn’t cover:

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

Commercial General Liability Insurance

As a software developer, most of your work is done at an office or in your home. As a result, you may not realize you’re also at risk for an accident, damage, or injury. That’s why you need commercial general liability insurance (GL insurance), in addition to a PL policy. It can help cover the costs associated with unexpected accidents or damage.

The truth is, you never know what can happen, especially if you invite a client into your workspace. That’s why we recommend general liability insurance to all software developers. In fact, we consider it a foundational policy because it can help cover expensive accidents or injury claims—averaging about $30,000 each!

Without general liability insurance, you may have to cover the costs of an accident or injury on your own. Unfortunately, medical bills can really add up, and they’re enough to put many developers out of business.

Let’s look at an example of how GL insurance can work. Imagine you invite a client to come to your office to discuss a potential project. After a successful meeting, your client goes to leave, but ends up tripping and falling down your stairs. Unfortunately, he’s badly injured, and needs to go to the hospital for his injuries. As a result, he wants to sue you for his medical costs.

Fortunately, with GL coverage, your policy may cover some or all of the costs of those medical bills, as well as legal fees if the client decides to sue you (up to your policy limit).

If you have general liability insurance, your policy can help cover costs associated with:

• Bodily injury to another person
• Third-party property damage
• Personal and advertising injury
• Medical expenses
• And more

Keep in mind, most GL policies don’t cover:

• Damage to your own personal property
• Professional services
• Workers compensation or injury to your employees
• Damage to your work
• Automobiles while in business use
• Expected or intentional injury or damage
• And more

Workers Compensation Insurance

Some software developers hire part-time or full-time help, especially if their businesses are growing. Even if you have just one employee, you should consider getting workers compensation insurance. This type of policy can help cover you if an employee gets injured or sick while working for you.

Some states even require you to carry workers compensation insurance before conducting work. It’s important to check your state’s laws first.

In general, most small business owners should get workers compensation insurance if they have employees. The average work injury claim can be extremely expensive—a whopping $41,000! Plus, work injuries are fairly common in the United States. Did you know that in 2018 Americans reported $170.8 billion in workers compensation claims?

Fortunately, if you have workers compensation insurance, your plan can typically cover:

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

Why Should I Get Insurance for Software Developer Business?

Many software developers don’t realize the importance of getting business insurance. Maybe you’re just starting out and want to keep costs down. Or maybe you don’t think a lawsuit can happen to you.

Here’s the bottom line. If you don’t have developer liability insurance, you’re at risk. A mistake can happen at any time, and accidents and injuries are far more common than we like to admit. You don’t want to put your livelihood and everything you’ve worked hard for at risk. That’s why getting business insurance is worth it.

Without a policy, you might be on the hook to pay thousands of dollars on your own. Just imagine if one of these claims is brought against you:

• Reputational Harm — $50,000
• Client Injury or Damage — $30,000
• Client Slip and Fall — $20,000

Can you afford to pay these costs on your own? For most software developers, business insurance is too important not to buy. Plus, if you have a policy, you can enjoy peace of mind knowing your business is protected.

If you think a lawsuit can’t happen to you, statistics aren’t on your side. Unfortunately, 43% of small business owners say they’ve dealt with a threatened or actual lawsuit. These days, it’s easy for clients to sue software developers, claiming negligence in their services. And whether you’re at fault or not, you may need to pay for a lawyer to defend yourself.

At Simply Business, we want you to avoid dealing with an expensive lawsuit on your own – because you shouldn’t have to! Business insurance is readily available to help protect software developers, and we’re here to help you find affordable coverage.

If you’re ready to get insurance today, go to our online quote form. We’ll ask you a few quick questions about your business. Then we’ll recommend policies that can work for you. If you’d like, we can also send you a certificate of insurance (COI) to share with clients and vendors.

So what are you waiting for? Get your free quotes today.

Software Developer Insurance FAQs

Why Choose Simply Business?

Getting insurance for your business doesn’t have to be complicated. At Simply Business, we’re here to make the process as easy as possible. We’re 100% focused on helping small business owners – like you – find affordable coverage.

Our online quote form makes shopping simple. In just a few minutes, you can compare quotes from the nation’s top insurers. Once you choose a plan, we work hard to make your coverage easy to understand. Our licensed insurance agents are available on the phone to help answer any of your questions.

Need a few other reasons to choose Simply Business?

• We go above and beyond. We’re not your standard insurance brokerage. We do everything possible to help you find the right policy. And if you need to use your insurance, we’re here to guide you every step of the way.

• We meet your needs. As a small business owner, you need the right level of coverage—at the right price. We can help you find an affordable policy that can fully protect your business.

• We understand software developers. Because we serve small businesses, we understand freelance developers like you. You can trust us to recommend policies that can uniquely protect you.

As a software developer, you have an important job to do. At Simply Business, we want you to focus on code, instead of worrying about lawsuits and other claims. We can help you secure an insurance policy to protect your business today.

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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.