Best Professional Indemnity Insurance For Software Developers

Software developers are often required to have professional indemnity insurance for software developers. This type of insurance protects developers from legal liability in the event that their software causes harm or injury to a third party.

Software developers’ most common types of coverage are errors and omissions insurance, defamation, intellectual property infringement, virus transmission, breach of confidentiality, loss of document or data and general liability insurance. Errors and omissions insurance covers any damages caused by a developer’s errors in the process of developing software.

All professional software developers need professional indemnity insurance for software developers, but how do you know the right insurance company for you> In this blog, I will show you everything you need to know about professional indemnity insurance for software developers and why you should have it in place.

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What Is Professional Indemnity Insurance For Software Developers?

Software developers are often faced with the question of how to get insurance coverage for their work. The truth is many developers are not aware that they need to be insured.

Insurance is important for software developers and you do not want to wait until something goes wrong before getting insured.

Professional indemnity insurance is a type of insurance that helps software developers to protect themselves against any legal or financial risks.

Software developers are one of the most vulnerable members in the tech industry. They are more likely to get sued for their work, and it is not uncommon for them to be threatened with lawsuits. That is why it is important for them to have professional indemnity insurance.

Professional indemnity insurance can be used by software developers who want to protect themselves against legal risks, or just want protection against being sued in general.

Software developers may want to insure their work with an indemnity insurance policy by purchasing a subscription through their company. This will cover the software developer and any co-workers who are involved in the development of the software.

This insurance can also be purchased as part of a business package if you are self-employed or obtained on your own outside of work.

Why Do Software Developers Need Professional Indemnity Insurance For Software Developers?

Software developers are in constant jeopardy of being sued because they work with a lot of sensitive data.

Software developers are one of the key players in the IT industry. They are responsible for creating software that is used by millions of people all over the world. Software developers have to make sure that their code is bug-free and secure so that it does not cause any harm to people who use it.

However, due to various reasons, some bugs and security flaws might be missed by software developers and these mistakes can result in a huge loss for both companies and customers, causing the company to press a legal case against the software developer.

This is where professional indemnity insurance comes in. It protects developers from any legal or financial risks that may arise from their work. It also protects their employer from the same risks.

That is why professional indemnity insurance has been introduced as additional protection for software developers from any kind of litigation-related risks.

Professional indemnity insurance is a type of liability insurance that protects professionals who develop, market or support products against the consequences of mistakes. As a software developer, when your software causes problems, you may be sued.

If you are covered by an indemnity liability insurance policy the legal fees are covered by that policy.

What Insurance Cover Do Software Developers Need? (Professional Indemnity Insurance For Software Developers)

Software developers are one of the most important and crucial members of a company. They are responsible for writing code, designing the user interface and testing the product.

Software developers are in a very high-risk occupation and they need to be covered by a good insurance plan. Here is the insurance coverage you should get as a software developer:

1. Professional Indemnity Insurance For Software Developers

Professional indemnity insurance is essential for any business that provides services to third parties. It covers any mistakes that arise from the services you offer. It could include compensation payments in case your client suffers financial loss, fines, IP and copyright disputes, legal costs and contract disputes as a result of the software you developed.

Every professional needs professional indemnity insurance. Your professional indemnity insurance will always be there to protect you in the event that you make a mistake, not just for liability issues.

2. Cyber Insurance

Cybersecurity is a top priority for all companies in the digital economy. With cyber-attacks on the rise and data storage requirements becoming more stringent as hackers can breach data anytime if not well-secured. These breaches can have devastating consequences for the businesses you work for.

With cyber-attacks on the rise and security threats becoming increasingly sophisticated, it is critical for software developers to take measures to protect themselves. Not many software developers are taking action to protect themselves with insurance.

Cyber insurance is essential for all software developers for compensation costs associated with possible legal costs or penalties.

3. Business Equipment Insurance

It is important to protect the equipment that is vital to your business. With a business equipment cover, you are getting a professional service to protect your equipment. You will get peace of mind knowing that if the unexpected happens, your company will not be left high and dry.

With business equipment insurance, you can protect all your gear from desktops to laptops to phones to specialized software and other equipment you use for your business.

4. Public Liability Insurance

Public liability insurance is something that you should consider if you are working with other people. This insurance can protect you in the event that your negligence causes injury to somebody or damage to their property.

5. Employers Liability Insurance

Employers’ liability insurance is a legal requirement for any business that hires people in a business capacity. This type of coverage protects the employer against legal liability for accidents or injuries that happen to employees on the job, such as slips and falls, occupational illness, or even death.

If as a software developer, you have employees and you do not have this insurance in place, you could be fined.

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Professional Indemnity Insurance Companies

Professional indemnity insurance is one of the most important types of professional insurance for software developers. Since software developers can be personally liable for the losses of their client’s data.

Backup insurance is also useful if the software developer uses data that is not his own, such as data derived from open-sourced or obtained legally but not owned by them. Here are the best professional indemnity insurance company:

1. AIG

AIG Insurance is one of the best and largest insurance companies in the world. Its professional liability insurance covers a variety of industries such as software developers, education, transportation, hospitality, healthcare, construction and more.

AIG offers a wide variety of professional liability policies to meet the needs of any business or organization. These policies can be customized to suit your specific needs and budget.

One of the most difficult aspects of running your own business is dealing with the uncertainty that comes with being a business owner. With AIG professional indemnity insurance policy, you can purchase a policy that is specifically designed for common errors in your industry.

If you want to get a quote for AIG professional indemnity insurance, you will need to contact an agent. AIG handles claims by the use of email and phone.

The details of the steps for handling claims are outlined in the guide and can be found on their website, but it is important to note that if you have any questions or concerns, you should get in touch with an AIG agent.

AIG Pros And Cons



Strong financial stability and reputable coverage Low service quality
Provides professional indemnity insurance for individuals in several industries Have to get a quote from an agent
Unique and standard business insurance product No general liability policies
Offers reputationGuard that protects you after a lawsuit
One of the best in the industry

2. Chubb

Chubb’s insurance provides protection to professionals such as software developers who may face lawsuits relating to their work. With Chubb, you can buy professional indemnity to protect you when things go sour.

Chubb can also provide coverage for technology risks such as cyberattacks and data breaches, as well as financial institutions risks such as frauds and cybercrimes. Finally, Chubb provides liability insurance for architects, engineers, lawyers, media, financial institutions, public entities, and tech companies.

Chubb is able to tailor its products to fit the needs of the individual business and has broad definitions for damages and who is insured.

With Chubb, you can get a quote online, online claim support and account management. Chubb provides insurance services in many states.

Chubb Pros And Cons



Excellent professional indemnity insurance policy Coverage may be too comprehensive
An extensive network of brokers and agents No life chat
Highly rated by major rating firms Limited online quoting
Wide variety of insurance policies for different kinds of industries
Discount is available for home-based businesses
Excellent customer service
Perfect for software developers

3. Pogo

Pogo’s insurance is the best insurance policy for freelancers such as software developers. This company offers a variety of plans to meet your needs. Pogo can help you to find the right coverage at a price that works for you.

Pogo is an insurance company that offers a variety of insurance plans to consumers, as well as provides a tool that allows consumers to compare plans. The marketplace also gives consumers the ability to purchase coverage in person at any of the licensed agents across the country.

If you are a freelancer, you will want to make sure that your coverage provides the right protection for your needs. Pogo offers insurance covers for independent contractors and understands that freelancers have unique needs when it comes to insurance.

Pogo plans are designed with self-employed professionals in mind and offer more than just the basics because the company knows the risks associated with freelancing. It offers customized programs that include protection against lawsuits and so on.

Pogo Pros And Cons



Finds the best cover for all freelancers Lack of instant rate quote online
Only one application will provide you with a lot of quotes from several insurance carriers so you can choose the right coverage Pogo has not revealed the insurance company it collaborates with
Coverage is specifically tailored to your needs
Pogo offers a lot of business insurance policies at affordable prices

4. The Hartford

The Hartford is one of the best insurance companies for software developers. The company has a strong reputation and good ratings, making it a well-known leader in the industry.

The Hartford is a leading insurer to businesses in a variety of industries. From accountants to graphic designers and software developers, The Hartford has the experience and knowledge to help your business find the right professional insurance for your needs.

They offer online quotes and claim management and help small business owners manage their risks. For example, The Hartford’s coverage includes property, liability and cyber-security. The Hartford can also help people with information about scenarios such as what to do in the event of a fire or theft.

It is essential to have a professional business insurance policy to protect your assets and income. A good commercial insurance policy will help protect you against lawsuits, claims, and losses that impair your ability to operate your business.

Insurance specialists can help you find the right coverage for your situation and budget.

The Hartford Pros And Cons



Fast online quote You need to speak to an agent to complete a purchase even if you get a quote
Online claim management Not available in New Jersey, Hawaii and Alaska
Flexible and easy to customize an insurance policy
Easy to understand explanation

5. Thimble Insurance

Thimble Insurance is a company that provides insurance for all kinds of risks. They provide coverage for businesses, software developers, freelancers and commercial properties.

Thimble insurance is the finest choice for small business professional insurance. Thimble insurance is affordable and easy to apply for. The application process is quick, and the company will help you get quick approval.

As your business increases its bottom line, you can effortlessly adjust your coverage. There are a variety of plans to choose from that suit your needs.

Whether you are a professional photographer with a studio, an entrepreneur with a home office, a professional chef in the kitchen, or a professional teacher, or a software developer, the coverage is affordable and will protect your business.

The good thing about Thimble is that you can buy annual coverage or individual projects that last for a few days or weeks. It means you will never pay for the cover you do not need. So, whether you are a freelancer, fitness professional, tech, software developer and so on.

Thimble Insurance Pros And Cons



Affordable insurance policy from only $36 It does not support an online claim
Short and long term policies It is not available in every state
Serves a wide variety of professionals
One of the best for software developers and freelancers


HISCOX is one of the most reputable insurance providers in the world, and it is a very strong company. It is rated A by both AM Best and Standard & Poor’s, meaning it is able to meet its financial obligations when claims come in.

As a result, HISCOX provides online quotes for its professional insurance coverage as well as 24/7 claims service anytime you are due for claims. The company provides worldwide coverage for claims, and it is a great company to work with.

HISCOX Pros And Cons



Discount on products No local agent network
One of the best insurance companies in the country Limited policies
Variety of insurance products Available in 49 of the 50 states
Easy to navigate website Mixed reviews from customers
Mobile app for on the go uses Not a BBB rated insurance company

Requirements For Professional Indemnity Insurance For Software Developers

Professional indemnity (PI) insurance is designed to protect professionals from the financial consequences of errors, omissions and negligence. It covers the cost of defending claims brought against you by your customers, as well as any compensation awarded to those customers.

Here is the requirement for professional indemnity insurance. You can read it for more information.

Who Needs Professional Indemnity Insurance

This is an important question to ask, as it will be a significant expense for a company. It is not just the company that needs it, but also the directors and employees working for them. Basically, anyone who can be held liable for any loss or damage that they cause to someone else needs professional indemnity insurance.

The decision on who needs professional indemnity insurance depends on what kind of work you do and the risks associated with it. For example, doctors need this type of insurance because their job involves risks like lawsuits from patients if they make a mistake or harm someone during surgery.

Other people who need professional indemnity are software developers, engineers, surveyors, financial consultants, accountants, healthcare professionals and more.

Professional indemnity and public liability insurance

If you are a professional in a specific field and you make mistakes, you may be able to claim professional indemnity insurance to cover the cost of your mistakes.

A claim for professional indemnity is usually made against your employer or your client. Public liability on the other hand is designed for people looking for a cover for damages, illness or injury.

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How To Calculate Professional Indemnity Insurance?

Calculating professional indemnity insurance costs varies from one insurer to other insurers. Each insurer will take a view of the risk your work poses and allocate a price based on the amount of risk.

Generally, the main thing that drives the cost of professional indemnity is the industry you work in, the professional fee you earn, the services you offer your clients and how much your work is exposed to risk factors.

Here are a few factors the insurers consider when calculating your insurance cost:

  • Experience: Your level of experience in delivering quality work or advice to your clients
  • Standard contract: Lack of standard contracts that mitigate the risk and legal scrutinizing can mean a lessened risk level.
  • Typical project: The size and nature of applicant projects are considered. If the project is a large scale one, it means higher risk and increased cost.
  • Financial stability: Applicant with financial stability is less likely to change business model, involve in M&A activities or downsize staff, which can impact claims.
  • Excessive fees: Excessive fees compared to the value of the contract may mean higher risk and can negatively impact the cost of your professional indemnity.
  • Claims experience: If you have been having severe claims without remedial action, it means you lack quality risk management and your cost will be high as a result.

Some of the insurers’ contractual preferences when calculating your professional indemnity cost include:

  • A consequential loss exclusion
  • Limitation of liability
  • A description of the service

An insurer will be glad to offer you a reduced rate if your work quality rate is high and if your claims in the past are limited.

Professional Indemnity Limit

An indemnity is a promise to protect against financial loss. Professional indemnity insurance is designed to protect professionals, freelancers and small business owners from liability arising from the services they provide.

The professional indemnity limit should be able to cover the dollar value of the claim and the cost of defending it. If the professional indemnity limit is not able to cover the loss, then there is no point.

Professional Indemnity Insurance is important for many professions as it shields them from the financial consequences of negligence, accidental errors and omissions. But often has a limit on how much they will cover in any one claim and companies are sometimes left paying a large legal bill out of pocket.

How Much Professional Indemnity Insurance Do I Need

The amount of Professional Indemnity Insurance you need depends on your work’s nature and the kind of clients your serve. For instance, if you work with big organizations that are heavily regulated, your PI requirements will be high.

The minimum quote can be around $10.62 a month. This quote should take care of common risks in your line of business. When you are seeking a cover, be sure to get the cover you need most.

Public Liability Limit Of Indemnity

A limit of indemnity is the maximum amount that an insurance company will pay to a policyholder in the event of an accident. The limit is often expressed as a percentage of the total sum insured.

The Public Liability limit of Indemnity (LOI) is the maximum amount of insurance the insurer will pay for a claim during the policy period.

There are two main ways to calculate the LOI, which are: (1) the limit of indemnity (the sum insured), which is the maximum amount the insurer will pay a claim in a policy period, and (2) the aggregate limit of indemnity (the sum insured up to a maximum amount), which is the maximum amount the insurer will pay on a claim during the policy period, regardless of the number of claims made during the policy period.

Subrogation In Insurance

Subrogation in Insurance is a process where an insurer can take over a claim from the policyholder and pursue the third party for reimbursement. This is done when the insurance company feels that their insured should be compensated but not by them.

Subrogation is a process where the insurance company pays for the insured property and then seeks reimbursement from the party who caused the damage. The subrogation process can be complicated and requires close attention to detail.

Subrogation is when an insurance company pays for a claim and then follows it up with a lawsuit against the third-party responsible for the accident.

When a car accident occurs, the insured driver’s insurance company pays for the car damages and then takes the claim to the court of law to get the driver that caused the accident to compensate the company for the costs.

How To Choose The Right Professional Indemnity Insurance Policy For Software Developers

Choosing the right professional indemnity insurance policy for software developers is a critical decision that can protect your business from financial liabilities. Here are some tips and guidelines to help you make an informed choice:

1. Assess Your Needs

Start by evaluating your specific risks and requirements as a software developer. Consider the nature of your projects, the type of clients you work with, and the potential liabilities you might face.

2. Research Insurance Providers

Look for reputable insurance providers with experience in serving software developers. Seek recommendations from colleagues or industry associations.

3. Compare Policies

Request quotes from multiple insurance providers and compare the policies they offer. Pay attention to the following key factors:

  • Limit of Indemnity: This is the maximum amount the insurance company will pay for a claim. Ensure the limit aligns with your potential liabilities and the contracts you enter into. It’s essential to have a sufficient limit of indemnity.
  • Scope of Cover: Review the coverage offered by each policy. It should protect you from the most common risks and liabilities associated with your work, such as professional errors, omissions, and breaches of contract.
  • Exclusions and Limitations: Carefully read the policy’s exclusions and limitations. Understand what is not covered and how specific circumstances might affect your coverage.
  • Excess or Deductible: The excess is the amount you must pay before the insurance coverage kicks in. Consider your budget and risk tolerance when choosing the level of excess you’re comfortable with.

4. Claims Process

Understand the claims process. A smooth and efficient claims process is essential. Ensure that the insurance provider has a clear and responsive procedure for filing and processing claims.

5. Premium Costs

Compare premium costs but avoid making your decision based solely on price. A policy with a lower premium may offer less coverage or have higher deductibles, which could leave you underinsured.

6. Tailored Coverage

Seek a policy that can be tailored to your specific needs. This may involve adding endorsements or additional coverage options to ensure comprehensive protection.

7. Legal Assistance and Support

Check if the policy includes legal assistance or support in the event of a claim. Legal costs can be a significant part of a professional indemnity claim, and having access to legal experts can be invaluable.

8. Financial Strength of the Provider

Research the financial stability and reputation of the insurance provider. You want to ensure they have the resources to pay out claims when needed.

9. Read Policy Documents Carefully

Before making a decision, read the policy documents carefully, including all terms and conditions. If there are any unclear clauses, seek clarification from the insurance provider.

9. Consult with a Broker or Advisor

If you’re uncertain about the details of a policy or how it applies to your specific circumstances, consider consulting with an insurance broker or advisor who specializes in professional indemnity insurance for software developers.

10. Review and Update Regularly

As your business evolves, your insurance needs may change. Regularly review your policy to ensure it continues to provide adequate coverage.

Common Myths And Misconceptions About Professional Indemnity Insurance For Software Developers

There are several myths and misconceptions surrounding professional indemnity insurance for software developers. These misunderstandings can lead to poor decisions or missed opportunities to protect a software development business. Here are some common myths and the truths behind them:

Myth 1: I Don’t Make Mistakes, So I Don’t Need Insurance

Truth: Even the most skilled software developers can make errors, or their work may not meet client expectations. Professional indemnity insurance provides a safety net, protecting you from unexpected liabilities.

Myth 2: I Have General Liability Insurance; I’m Covered

Truth: General liability insurance covers bodily injury and property damage claims, not professional errors or negligence. Professional indemnity insurance is specifically designed to cover the work you perform.

Myth 3: Clients Will Always Foot the Bill for Errors

Truth: While clients may be responsible for some losses, disputes can lead to legal action. Having insurance can help protect your interests and avoid lengthy, costly legal battles.

Myth 4: I’m a Freelancer; I Don’t Need Insurance

Truth: Freelancers can still face legal claims and disputes. Having professional indemnity insurance is essential for freelancers, just as it is for larger software development companies.

Myth 5: I Only Work with Small Clients; They Won’t Sue

Truth: Legal claims can come from clients of all sizes. A contract dispute or a project that doesn’t meet expectations can lead to legal action, regardless of the client’s size.

Myth 6: I Can’t Afford Professional Indemnity Insurance

Truth: While insurance premiums vary, professional indemnity insurance is generally affordable, especially when compared to the potential costs of legal claims and settlements.

Myth 7: It’s a One-Size-Fits-All Solution

Truth: Policies can be customized to meet your specific needs. Software developers should work with insurers to tailor coverage to their unique risks and projects.

Myth 8: I’m Covered Forever Once I Buy a Policy

Truth: Insurance policies need to be reviewed regularly. As your business evolves, so do your risks. It’s important to update your coverage to match your current circumstances.

Myth 9: I Can Get Insurance When a Claim Arises

Truth: Insurance typically does not cover claims that arise before the policy’s inception. It’s essential to have insurance in place before you start work to ensure you’re protected from the beginning.

Myth 10: I Don’t Need Insurance Because I Use Contracts

Truth: Contracts are an important part of risk management, but they may not fully protect you from all legal claims or disputes. Professional indemnity insurance provides an additional layer of protection.

FAQs For Professional Indemnity Insurance For Software Developers

Do Software Developers Need Public Liability Insurance?

The answer is yes and no. If you work from home or your office but never come in contact with other people when you are doing your work, you may not need public liability insurance. However, if you work among people whether, at your client’s office or a café, you need public liability insurance.

What Is Another Name For Professional Indemnity Insurance?

Professional indemnity insurance is also called Professional liability insurance (PLI) or errors & omissions (E&O) insurance as it is commonly called. It protects your business from liability claims and lawsuits if you make a mistake in your work. All professionals should have this insurance in place to protect them.

What Is Generally Covered By Professional Indemnity Insurance For Software Developers?

Professional Indemnity Insurance is a type of insurance policy that covers the cost incurred by the insured person as a result of claims made against him/her in connection with professional work.

The insurance company pays for the legal costs, court fees, errors or omissions and settlements made to the claimants.

What Professional Indemnity Does Not Cover?

Professional indemnity provides you cover for errors, omissions and legal costs but may not provide you coverage for fraudulent activity or deliberate wrongful acts. Some policies may cover dishonesty and fraud but such cover would involve certain inclusions.

Is Professional Indemnity Mandatory?

If you offer services that other people or businesses rely upon, professional indemnity insurance is essential to protect you in case of errors, omissions or data breaches. The truth is not having professional indemnity insurance in place is a serious risk for your business.

Is Professional Indemnity Insurance The Same As Public Liability?

No, professional indemnity insurance is not the same as public liability insurance. While public liability insurance is tailored for claims by the insured for damage, illness and injury, professional indemnity is tailored for claims by the insured for professional negligence or mistakes.

Do I need Public Liability And Professional Indemnity Insurance?

A professional indemnity insurance policy will cover you in the event of a claim being made against you. It is important to have this type of insurance if you are working as an accountant, software developer, lawyer, doctor, or other professions that carry a risk of claims being made against them.

Professional liability insurance covers a range of potential risks such as illness, damages and injury. Some companies do require professional liability insurance. These insurance coverages are good to avoid financial problems in case of any issues.

Does A Self-employed Person Need Public Liability Insurance?

Public liability insurance is not a necessity since it is not required. However, if your business involves interactions with the public, having public liability insurance in place will help you in case of any problem that arises as a result of your interaction with other people.

What Other Insurance Do Software Developers Need?

Many software developers do not know what other insurance they need aside from professional indemnity insurance. Some of the most important ones are Cyber insurance and business content insurance.

What Insurance Do Web Developers Need?

All web developers need cyber liability insurance to help them survive cyber attacks and data breaches. Cyber liability insurance will help web developers pay for recovery expenses, legal fees and notification costs in case of data breaches and cyber-attack that cause a client to sue over a breach.

The Bottom Line On Professional Indemnity Insurance For Software Developers

Professional Indemnity Insurance is a type of insurance that protects the insured person from losses due to claims made against their professional negligence.

If you do not want to take any risks in the event of errors and omissions that occur as a result of your mistakes or negligence, it is a good idea to have this professional indemnity insurance in place.

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