How Much Does Software Developer Business Insurance Cost? 2025 Rates

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?

In the U.S., software developers usually spend $480 to $840 a year on business insurance. That’s about $40 to $70 each month. The price can vary based on your job type, location, and whether you work alone or with a team. 

Software developers often need business insurance to stay protected from risks like mistakes or accidents at work. Many people want to know how much it costs before getting it. 

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

Being aware of these factors can help you estimate your insurance needs and know what it will really cost to protect your software developer business. 

Average Software Developer Insurance Costs For Coverage Types

Software developers can choose different types of insurance to protect their work and business. Each type of coverage has its own cost, and knowing the average prices can help you plan your budget. 

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 insurance helps protect your business if someone sues you for accidents, property damage or injuries. For a software developer, this type of insurance is useful if you meet clients in person, attend events, or want extra protection from unexpected accidents.

You can also get business interruption insurance to cover lost income if your business has to close because of a fire, storm, or other disaster. 

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

Policy limits: $1 million per occurrence and $2 million aggregate.

Here’s a look at the average annual premiums for 10 different states:

Note: These estimates are based on average annual premiums for software developer businesses, compiled from both national carriers and regional insurance agencies. They reflect typical coverage limits for small-to-medium operations, considering risks such as client site visits, third-party property damage, and general liability exposures in tech offices. Actual premiums will vary depending on business size, number of employees, claims history, and whether additional policies (like Technology Errors & Omissions or Cyber Liability) are bundled with General Liability coverage.

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 your software or tech services cause a client to lose money.

For example, 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.

Several factors impact the cost of errors and omissions insurance, including how much coverage you want, how big your business is, and what kind of software you create.

Policy limits: $1 million per occurrence; $1 million aggregate

Here’s a look at the average annual premiums for 10 different states:

Note: These estimates are based on average annual premiums for software developer businesses as reported by both small and large insurance agencies. They reflect typical coverage costs for Technology Errors & Omissions Insurance, which protects against claims of negligence, coding mistakes, or financial losses caused by software failures. Actual premiums will vary depending on factors such as company size, revenue, claims history, coverage limits, and the specific risk environment in each state.

Workers’ Compensation Insurance

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

Workers compensation helps cover medical costs and lost wages if an employee gets hurt or sick because of work. Software development companies with employees usually need workers compensation to follow state rules and avoid fines. 

For example, one of your employees is working long hours at their desk and faces severe neck pain, 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.

Several factors impact the cost including, the size of your payroll, the type of work employees perform, your claims history, and any implemented safety programs.

Here’s a look at the average annual premiums for 10 different states:

Note: These estimates are based on average annual Workers’ Compensation premiums for software developer businesses, incorporating state-specific base rates, employee classifications, and payroll ranges typical of both small boutique development firms and larger software agencies. Actual premiums will vary depending on your company’s size, claims history, number of employees, and insurer underwriting practices.

Commercial Auto Insurance

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

Commercial auto insurance covers vehicles that you use for your business. Even if you mostly work on computers, having this insurance is important if your business vehicles are involved in accidents. It protects both your business and your employees from big costs. 

Most states require technology companies to have this insurance for their company vehicles. 

Several factors impact the cost, such as the policy limits you choose, the value of your vehicle, coverage options, and driving records of anyone permitted to drive. 

Here’s a look at the average annual premiums for 10 different states:

Note: These estimates reflect average annual premiums for software developer businesses that may operate small commercial vehicles such as sedans, SUVs, or vans used for client visits, equipment transport, or mobile IT services. Rates are based on blended averages from both small and large agencies, incorporating regional risk exposure, liability coverage levels, and typical usage patterns unique to technology service providers. Actual premiums will vary depending on fleet size, driving history, geographic territory, and insurer underwriting practices.

Cyber Insurance

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

Cyber insurance helps protect your business if you face issues like hacking, or a data breach.

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.

Here’s a look at the average annual premiums for 10 different states:

Note: These estimates are based on average annual premiums for Software Developer businesses, reflecting data from both small and large insurance agencies. Actual premiums will vary depending on factors such as company size, claims history, coverage limits, and regional risk exposure.

Software Development Business Insurance Costs By Provider

Software development business insurance costs will vary greatly depending on the insurance carrier. Use the table below to find average costs across different providers.

Note: These estimates are based on average annual premiums for software development businesses, considering both small and large agencies. Coverage typically includes general liability, professional liability (errors & omissions), cyber liability, and workers’ compensation. Actual premiums will vary depending on factors such as company size, number of employees, type of software developed, claims history, and coverage limits.

What Factors Impact Your Software Developer Insurance Costs?

When it comes to buying insurance as a software developer, the cost can vary depending on a few key factors. Understanding these factors can help you better plan for how much you’ll need to spend. 

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

Insurance costs for software developers can add up, but there are ways to lower them. By taking the right steps, you can reduce the amount you pay for coverage without sacrificing protection. Here are some practical ways to lower your software developer insurance costs:

1. Policy Bundles

If you buy multiple types of insurance from the same company, you can often get a discount. This is called bundling. For software developers, bundling your policies can be an easy way to reduce costs while still getting the coverage you need. 

2. Choose The Right Coverage Type

Picking the right insurance coverage is important for saving money. Different types of insurance protect you in different ways, and you only need to pay for what fits your business. By choosing the coverage that matches your specific needs, you can avoid paying for unnecessary protection. 

3. Pay Annually Instead Of Monthly

One way to save on insurance costs is by paying for the whole year upfront, instead of monthly. Many insurance companies offer a discount if you pay annually. If you can afford to pay all at once, it can be a good way to lower your overall insurance costs. 

4. Review And Adjust Your Coverage Annually

It’s a good idea to review your insurance coverage every year to make sure it still fits your needs. As your business grows or changes, you might need more or less coverage. This can help you keep your insurance costs under control. 

5. Adjust Your Deductible

Your deductible is the amount you pay out of pocket before insurance coverage kicks in. If you choose a higher deductible, your monthly premium will usually be lower. This can help reduce your insurance costs. However, keep in mind that you’ll need to pay more if you make a claim.