Why do software developers need insurance?
Testing software and diagnosing problems is part of your offering as a software developer, but sometimes even your fixes might create problems elsewhere.
You might be tasked with programming system software to drive efficiency for a client – if your code causes a malfunction, the operational consequences could be significant. As a software developer, having professional indemnity insurance in your policy can provide reassurance. If the client seeks compensation, legal fees and demands could be covered.
A client has tasked you with developing and rolling out a new intranet system for their business. Everything was on track and going to plan until one of your developers unexpectedly walked out, leaving you struggling to hit deadlines. With the agreed go-live date missed, your client notifies you it will be taking you to court over breach of contract.
Professional indemnity insurance can help to pay compensation and legal costs should you be sued over breaching your contract.
A client injury
Building out the software for a client’s digital app launch feels like an exciting project – until your client becomes injured at a pre-launch meeting. It’s a simple slip in the stairwell that leads to a broken bone. In software development, not all risks are related to your technical work, so including public liability cover in your insurance policy may offer comfort. If your client decides to recover compensation, this type of insurance can help with defence costs and pay-outs.
What insurance is available for software developers?
These are just some of the types of business insurance we offer for software developers. We can provide other cover types and build them into a policy tailored to the requirements of your business.Get your quote
Insurance for software developers: FAQs
What sort of insurance is a software development company with staff required to have by law?
Under UK law (external link), software development companies with staff are usually required to have employers’ liability insurance. If your business needs it, failure to purchase this cover can even result in fines.
Such staff might be full-time, permanent developers, IT support employees or casual staff members such as work experience interns. Either way, the rule might apply.
Employers’ liability insurance can back your business against risks related to your responsibility to staff. If they’re injured or become ill because of their work, this product can help cover your firm’s legal expenses and help to pay compensation on your behalf.
Do software developers need professional indemnity insurance?
For many software developers, professional indemnity insurance could offer welcome protection – though the question of whether you need it is personal to each business.
Adding this type of insurance to your policy may be suitable if you provide advice or software consultancy work.
Complaints of failure to deliver can arise without fault by you. Project creep, for instance, can lead you to miss key software targets – and your client might complain, even if they moved the benchmarks. If you’d prefer not to risk paying for legal fees and compensation yourself, then this type of insurance can help.
Is past work covered under my software development insurance?
Hiscox professional indemnity insurance can cover software developers for past work as long as you have held continuous PI cover, either with Hiscox or another insurer. This can be helpful if you face a claim from a former client – for instance, if they spot an error in code you’d written the previous year and attempt to claim compensation for alleged losses.
To understand how far back cover can go, it may be important to understand your retroactive date.
Do computer programmers need insurance?
For computer programmers, insurance isn’t a necessity unless they employ someone, when they’ll require employers’ liability insurance under UK law. While insurance may not be a necessity otherwise, it can prove useful in the event of mistakes or accidents. At Hiscox, we offer a range of products and policies designed to protect you from the risks you may encounter.
What insurance should a software company have?
If the software company employs staff, employers’ liability insurance will usually be mandatory. Software developers’ insurance can include public liability insurance in case your work harms a member of the public. Professional indemnity insurance can protect you if a mistake affects a client. And as you’ll be working with computers, cyber and data insurance can help with breaches or viruses.
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