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Software and IT work carries two kinds of exposure that most trades do not combine: a professional claim when delivered work misses the mark, and a data or security incident when something a client trusted you with goes wrong. This guide puts numbers on both liability policies, then covers why cyber cover belongs alongside them, what client contracts actually require, and whether coverage still responds once a project has shipped.
How much does software developer insurance cost per month?
Professional liability (E&O) is the policy most client contracts ask for by name: it pays when a client says your code, advice or delivery cost them money, whether the fault was real or just alleged. General liability is the more ordinary cover: it pays if a visitor is injured or property is damaged at your office or a client site. A business owner’s policy bundles general liability with property cover, usually for less than buying the two apart.
| Coverage | Typical monthly | Typical annual | What it covers |
|---|---|---|---|
| Professional liability (E&O) | $38–$65/mo | $456–$780/yr | Claims that your code, advice or delivery cost a client money. Also called errors & omissions. |
| General liability ($1M per occurrence) | $29–$50/mo | $348–$600/yr | Third-party injury and property damage. Covers your office and client-site visits, where E&O does not. |
| Business owner’s policy (BOP) | $53–$92/mo | $636–$1,104/yr | General liability and commercial property bundled, usually with business-interruption cover. Cheaper than buying both separately. |
| Hiscox advertised starting price | from $22.50/mo | from $270/yr | E&O from $22.50, general liability from about $29, a BOP from about $42. |
Most software and IT businesses need both professional liability and general liability, not just one, and a growing share of client contracts add cyber to the list. Our guide to general liability vs professional liability vs BOP walks through when each applies; software development is one of the trades that leans on E&O first, general liability second, and cyber as a close third.
Software developer insurance cost by business size
Insurers rate mainly on revenue and headcount, since both stand in for how many projects, and how much money is riding on them, a business runs in a year.
| Business size | Professional liability monthly | Professional liability annual |
|---|---|---|
| Just me | $30–$52/mo | $360–$624/yr |
| 2–5 people | $38–$65/mo | $456–$780/yr |
| 6–20 people | $59–$101/mo | $708–$1,212/yr |
| 21–50 people | $90–$156/mo | $1,080–$1,872/yr |
| 51+ people | $136–$235/mo | $1,632–$2,820/yr |
Software developer insurance cost by state
Where you work matters nearly as much as the size of your business. High-cost, litigation-heavy states price professional liability higher; quieter states price it lower. The spread across the twelve states below is close to two to one.
| State | Professional liability monthly | Professional liability annual |
|---|---|---|
| Florida | $59–$101/mo | $708–$1,212/yr |
| Massachusetts | $51–$94/mo | $610–$1,130/yr |
| Washington | $51–$94/mo | $610–$1,130/yr |
| California | $53–$91/mo | $636–$1,092/yr |
| New York | $53–$91/mo | $636–$1,092/yr |
| Maryland | $47–$88/mo | $560–$1,060/yr |
| North Carolina | $47–$88/mo | $560–$1,060/yr |
| Virginia | $45–$84/mo | $540–$1,010/yr |
| Texas | $46–$79/mo | $552–$948/yr |
| Illinois | $46–$79/mo | $552–$948/yr |
| Utah | $42–$78/mo | $500–$940/yr |
| Georgia | $38–$65/mo | $456–$780/yr |
All fifty states, for every trade and all three policies, are in our guide to average business insurance cost by state. We also cover software developers and IT businesses directly in Maryland, Massachusetts, North Carolina, Utah, Virginia and Washington.
Software developer insurance cost by limit
Limits are the second lever after location and size. The first figure is the most the policy pays for any one incident, the second the most it pays across a policy year. $1M/$2M is the standard because it is what most client contracts ask for.
| Limits (per occurrence / aggregate) | Professional liability monthly | Professional liability annual |
|---|---|---|
| $500K / $1M | $27–$47/mo | $324–$564/yr |
| $1M / $2M (standard) | $38–$65/mo | $456–$780/yr |
| $2M / $4M | $49–$85/mo | $588–$1,020/yr |
| $1M plus a $1M umbrella | $89–$153/mo | $1,068–$1,836/yr |
Moving from $500K to $1M costs about $11 a month at the low end, and the $500K policy is the one a larger client or prime contractor is most likely to bounce back as too thin. Our guide to the cost of $1 million liability insurance goes further into what each limit buys.
Why software development prices below the small-business average
IT and software development sits at 0.85 in our calculator against a national baseline of 1.00 — the second-lowest trade multiplier we use, above only consulting’s 0.80. The reason is exposure, not paperwork: development work is almost entirely desk-based and remote, so the physical, foot-traffic risk that drives general liability for most trades barely applies. What keeps it a notch above consulting is delivery risk — software ships into production, runs client infrastructure and touches client data in a way that a pure advisory engagement usually does not, which is also why cyber cover matters more here than in most low-risk trades.
Cyber coverage belongs alongside your liability policies
Professional liability responds when a client says your work cost them money. It was never built to cover a breach, a ransomware event or a client’s data landing somewhere it shouldn’t — that is what cyber insurance is for. A developer or IT firm handling production systems or client data carries both exposures at once, and an increasing number of client contracts, particularly cloud, government-adjacent and enterprise work, name cyber cover as a requirement alongside E&O. Pricing it separately from the ranges above, since it depends heavily on the data you handle, is worth doing before you quote a contract that requires it.
What client contracts actually require
Larger clients, agencies and primes typically ask for a certificate of insurance before work starts, not after. The request usually carries two conditions: $1 million per occurrence of professional liability, which is why $1M/$2M limits are assumed throughout this guide, and sometimes additional insured status on the general liability policy, extending cover to the client for claims arising from your work on their systems. Having both in place before you bid on a contract means a requirement never stalls a start date.
How to get the cheapest honest quote
- Carry both professional liability and general liability. They cover different claims, and most client contracts ask for both.
- Add cyber cover if you handle client data or production systems. It is a separate policy from E&O and is increasingly a contract requirement in its own right.
- Name your actual scope of work. Custom development, IT consulting, managed hosting and app maintenance each carry a different risk profile and should be told to the insurer up front.
- Report the right revenue and headcount. Premiums are audited, so overstating costs you now and understating costs you later.
- Quote $1M/$2M limits from the start. The $500K policy saves a few dollars a month and is the one a larger client bounces back most often.
- Compare two or three carriers. The same coverage can cost far more at one insurer than another for a risk this small.
Where these numbers come from
Every range on this page starts from the national monthly averages we use across the site: $45 for general liability, $59 for professional liability and $83 for a business owner’s policy. Those are scaled by a trade risk class, a business-size multiplier, a state multiplier and a limit multiplier, which is the same arithmetic our small business insurance cost calculator runs, so the two agree. Software developers and IT businesses sit at a multiplier of 0.85 in that calculator, below the national baseline. The low and high ends of each range reflect a 0.75 to 1.30 spread from the cheapest to the dearest carrier writing that risk. For the method behind the base figures, see our guide to how much small business insurance costs and the average business insurance cost benchmarks.
Hiscox and software & IT businesses
Hiscox writes software developers and IT businesses, including solo developers and small teams, and quotes online in about five minutes. It advertises professional liability from $22.50 a month, general liability from about $29 a month and a business owner’s policy from about $42 a month. Those are entry prices for the lowest-risk businesses within a trade, so a solo developer with modest revenue should expect a quote closer to them than to the top of the ranges above.
Why Hiscox
Hiscox is built for small, service-based businesses, with an A (Excellent) rating from AM Best and online quotes in minutes. Available in 49 states plus DC, not Alaska.
Frequently asked questions
How much does software developer insurance cost per month?
A software or IT business of two to five people pays about $38–$65 a month for professional liability (E&O) nationally, or $456–$780 a year. General liability runs about $29–$50 a month, and a business owner’s policy bundling the two costs about $53–$92. A solo developer pays nearer $30–$52 a month for professional liability. Hiscox advertises coverage from $22.50 a month, quoted online in about five minutes.
Do software developers need business insurance?
Most client contracts, especially with larger companies, government-adjacent work and cloud vendors, require proof of professional liability and often cyber cover before work can start. Even without a contract requirement, a missed deadline or a bug that costs a client money is the kind of claim professional liability is written for, and it is the exposure this trade actually faces day to day.
Does E&O cover a claim that arises after a project has ended?
It can, depending on how the policy is written. Many E&O policies are claims-made, meaning coverage responds to claims reported while the policy is active, so it is important to keep coverage in force even after a project is delivered and the client relationship has ended.
Is cyber insurance separate from professional liability?
Yes, and both matter for this trade. Professional liability responds to a client’s claim that your work or advice cost them money. Cyber insurance responds to a breach, ransomware event or data incident, covering notification duties, forensic costs and recovery work. A developer handling client data or production systems is exposed on both fronts.
We subcontract to a larger prime contractor or agency. Do we still need our own coverage?
Usually yes. Primes and agencies commonly require subcontractors to hold their own E&O and cyber policies before assigning work, and having your own coverage protects your firm directly rather than relying on someone else’s protection.
Do I have to buy through you?
No. This site publishes cost guides and earns a commission if you get a quote through a partner link. We are not an insurer or a broker, we do not sell your details, and a quote costs you nothing and commits you to nothing.
Disclaimer: Informational only, not insurance advice or a substitute for a licensed agent. Coverage descriptions are summaries; policy terms govern. Availability and pricing vary by state and business, and prices are illustrative. Hiscox is available in 49 states and DC, not Alaska.