How Much Does Software Developer Business Insurance Cost? 2025 Rates

In 2025, U.S. software developers can expect to pay between $480 and $840 annually for comprehensive business insurance, averaging $40 to $70 per month. The primary cost drivers are location, type, and complexity of services you offer, coverage limits, number of employees, and your experience or reputation.

How Much Does Software Developer Insurance Cost?

Software developers in the U.S. usually pay between $480 and $840 per year for business insurance. That comes out to around $40 to $70 per month. This cost can change depending on what kind of work you do, where you live, and whether you work alone or have a team.

Not all developers need the same type of insurance. A solo freelancer working from home will likely pay less than someone running a company with employees. If you work with sensitive data, like customer information or financial records, you may need more coverage, which can increase the cost.

Other things that affect the price include how valuable your equipment is and if your work involves higher risks, like cybersecurity or large contracts. Where you live also matters, developers in areas with more lawsuits or higher business risks might pay more. Each situation is different, so business insurance costs will vary.

Here are some of the biggest cost drivers:

• Number of employees (affects workers’ comp and liability)
• Property size and value (affects commercial property coverage)
• Past claims history (insurers charge more if you’ve filed claims)
• Business interruption coverage and other add-ons

Understanding these variables can help you better estimate your insurance needs and prepare for the real costs of protecting your software developer business.

Average Software Developer Insurance Costs For Coverage Types

When it comes to protecting your software development business, different types of insurance cover different risks. Understanding the average cost, coverage details, and what influences pricing for each policy type can help you build a more effective insurance plan. Here’s a closer look at the major coverages most software developers need.

• General liability insurance: $40 per month
• Technology errors and omissions insurance: $87 per month
• Workers’ compensation insurance: $39 per month
• Commercial auto insurance: $210 per month
• Cyber Insurance: $146 per month

General Liability Insurance

The average cost of general liability insurance for a software developer is about $40 per month.

General liability covers third-party bodily injury, property damage, and advertising injuries. For example, your software company sets up a booth at a tech conference to showcase a new app. During the event, one of your team members accidentally knocks over a display, damaging another vendor’s expensive equipment. The vendor files a claim to recover the repair costs.

In this situation, general liability insurance would help pay for the damages to the other vendor’s equipment, as well as any legal fees if you’re held responsible.

Typical policy limits are $1 million per occurrence and $2 million aggregate.

Factors that influence the cost include the business size, location, customer traffic volume, and previous claims history.

Technology Errors And Omissions Insurance (Tech E&O)

The average cost of technology errors and omissions insurance for a software developer is about $87 per month.

Technology E&O insurance protects you if a client claims your work caused them a financial loss. This can happen if you make a mistake in your code, miss a deadline, or your software doesn’t work as promised.

You develop a custom e-commerce website for a client. After launch, the payment system doesn’t work properly, and the client loses several days of sales. They blame your code and sue your business for the money they lost.

In this case, Technology E&O insurance would help pay for your legal defense and possibly cover the client’s financial losses, depending on your policy.

The cost of errors and omissions insurance for software developers depends on things like how much coverage you want, how big your business is, and what kind of software you create.

Workers’ Compensation Insurance

The average cost of workers’ compensation insurance for a software developer is around $39 per month.

Workers’ comp covers medical bills, rehabilitation, and lost wages for employees injured on the job. For example, one of your employees is working long hours at their desk and develops carpal tunnel syndrome, a painful wrist condition. They need medical treatment and time off to recover.

In this case, workers’ compensation insurance would help pay for their medical bills and part of their lost wages while they’re unable to work.

Policy limits are regulated by each state, but typically include medical costs and a percentage of lost wages without a set cap.

Premiums are influenced by the size of your payroll, the type of work employees perform, your claims history, and any implemented safety programs.

Commercial Auto Insurance

The average cost of commercial auto insurance for software developers is about $210 per month.

Commercial auto insurance covers vehicles owned or used by the business for accidents, theft, vandalism, or damage. For example, your software company owns a vehicle used by an employee to visit client offices and attend meetings. One day, while driving to a client’s site, the employee gets into a car accident and damages another car.

In this case, commercial auto insurance would help pay for the repairs to the other car and cover any legal costs if the other driver makes a claim.

Factors influencing the cost include the number and type of vehicles, how often they are used, the driving records of employees, whether deliveries are local or long-distance, and whether you add endorsements like hired and non-owned auto insurance (HNOA) for employee-owned vehicles used for deliveries.

Cyber Insurance

The average cost of cyber insurance for software developers is about $210 per month.

Cyber insurance helps protect your business if something goes wrong with your computer systems or data. This can include things like hackers stealing information, data breaches, or computer viruses that cause damage.

For example, you develop software that stores customer information. One day, a hacker breaks into your system and steals sensitive data. Your clients get worried, and some sue your business for not keeping their information safe.

In this case, cyber insurance would help pay for fixing the security breach, informing your customers, and covering legal expenses.

What Factors Impact Your Software Developer Insurance Costs?

Insurance companies decide how much you pay based on the risks in your business. For software developers, things like the type of work you do, where you work, and your past insurance claims can affect your insurance cost. Many different factors help decide your premium.

Type Of Software Work

Different kinds of software projects come with different risks. For example, a developer building simple websites usually pays less for insurance than someone creating complex financial or healthcare software. More complex work often means higher insurance costs because the risks are bigger.

Data And Client Type

Handling sensitive data, like personal or financial information, can increase your insurance premiums. If your software deals with important client data, you might need extra coverage for mistakes or data breaches.

Location

Where your business is located can affect your insurance cost. Developers in areas with more lawsuits or business risks may pay more. If you work from home or a low-risk area, your premiums might be lower.

Business Size

If you have employees or a larger office, your insurance costs will usually be higher. More people and equipment increase the chance of accidents or claims, which can raise your rates.

Equipment And Software Value

Expensive computers, servers, and software licenses can affect your insurance costs. Protecting these valuable assets may require extra coverage.

Claims History

If you have made many insurance claims before, your insurer may see you as higher risk and charge more. Having a clean record can help lower your rates.

How To Lower Your Software Developer Insurance Costs

Running a software house is expensive, but your insurance bill doesn’t have to break the bank. While you can’t eliminate the need for coverage, you can take smart steps to reduce your premiums without sacrificing protection. Here are some practical ways to lower your software developer insurance costs:

1. Bundle Your Policies

One of the easiest ways to save is by bundling multiple policies. Most insurers offer a Business Owner’s Policy (BOP) that combines general liability and property insurance at a lower rate than if you bought them separately. If you also need workers’ compensation, bundling both through the same provider can lead to additional discounts. Not only does this simplify your paperwork, but it also makes your coverage more cost-efficient.

2. Ask About Discounts

Insurance companies often reward software developers that commit to a policy long-term. Ask your provider if they offer multi-year discounts for signing a two- or three-year agreement instead of renewing annually. You might also qualify for lower rates if you pay your premium in full instead of in monthly installments.

3. Implement Safety Measures

Accidents can cost a lot of money for both you and your insurance company. If you take steps to keep your customers and employees safe, your insurance may cost less over time. For example, keeping your workspace tidy, making sure cables are organized and not a tripping hazard, having good lighting, and keeping your equipment in good condition can help reduce risks and lower your insurance costs.

4. Create A Safe Working Environment

Having a good safety program can help lower your workers’ compensation insurance costs. This means training your team on how to work safely, like proper ways to sit at a desk, using equipment correctly, and knowing what to do in emergencies. When fewer accidents happen, you make fewer insurance claims, which can help keep your insurance costs down.

5. Adjust Your Deductible

Your deductible is the amount you pay out of pocket before insurance coverage kicks in. Choosing a higher deductible can significantly reduce your monthly premiums. Just make sure you can comfortably cover that amount if a claim arises.

By taking these steps, you not only save money but also make your software development business a safer, and more resilient business.