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) | $94–$188/mo | $1,128–$2,256/yr | Claims that your code, advice or delivery cost a client money. Also called errors & omissions. |
| General liability ($1M per occurrence) | $25–$49/mo | $300–$588/yr | Third-party injury and property damage. Covers your office and client-site visits, where E&O does not. |
| Business owner’s policy (BOP) | $28–$55/mo | $336–$660/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. |
Estimates from Insureon’s published medians for IT and software businesses at standard $1M/$2M limits, national, business of two to five people. Not quotes. Hiscox writes coverage in 49 states plus Washington DC (not Alaska).
See these costs for your own business size, revenue and state
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 | $94–$110/mo | $1,128–$1,320/yr |
| 2–5 people | $94–$188/mo | $1,128–$2,256/yr |
| 6 or more people | $110–$188/mo | $1,320–$2,256/yr |
Estimates from Insureon’s published medians, not quotes. No source publishes prices by headcount, so we show the lower half of the range for a one-person business under $100k in revenue, the whole range for two to five people, and the upper half for six or more. Larger businesses often pay more than this, especially for workers’ comp.
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 ranges below start from Insureon’s published medians for IT and software businesses and adjust them for each state’s published general liability median.
| State | Professional liability monthly | Professional liability annual |
|---|---|---|
| Florida | $115–$229/mo | $1,380–$2,748/yr |
| Massachusetts | $92–$183/mo | $1,104–$2,196/yr |
| Washington | $94–$188/mo | $1,128–$2,256/yr |
| California | $88–$175/mo | $1,056–$2,100/yr |
| New York | $92–$183/mo | $1,104–$2,196/yr |
| Maryland | $88–$175/mo | $1,056–$2,100/yr |
| North Carolina | $88–$175/mo | $1,056–$2,100/yr |
| Virginia | $88–$175/mo | $1,056–$2,100/yr |
| Texas | $90–$179/mo | $1,080–$2,148/yr |
| Illinois | $83–$167/mo | $996–$2,004/yr |
| Utah | $94–$188/mo | $1,128–$2,256/yr |
| Georgia | $98–$196/mo | $1,176–$2,352/yr |
Estimates for IT and software businesses of two to five people, from Insureon’s published medians adjusted by each state’s published figure. Not quotes.
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 | No published figure | No published figure |
| $1M / $2M (standard) | $94–$188/mo | $1,128–$2,256/yr |
| $2M / $4M | About the same as $1M/$2M | About the same as $1M/$2M |
| $1M plus a $1M umbrella | No published figure | No published figure |
Insureon publishes its medians at the standard $1M per claim / $2M total limit, which most client contracts ask for. Its customers who choose $2M/$4M pay a median of $46 a month nationally against $45 at $1M/$2M, so doubling the limit adds little. No source we use publishes prices for other limits, so ask the insurer to price the options before you choose.
No source publishes a price for a $500K policy, 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 pays less for general liability and more for E&O
Insureon’s IT and software customers pay a median of $37 a month for general liability, against $45 across all its small business customers, but $110 for professional liability, against $88. 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 pushes professional liability up 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. Insureon’s IT customers pay a median of about $179 a month for cyber liability, against $129 across all its small business customers. Price it separately from the ranges above, since it depends heavily on the data you handle, 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. Checking which of the two a contract names, and at what limit, before you bid avoids a delay at the start.
How to get an accurate quote at a fair price
- 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
The figures at the top of this page and in the main cost table come from the same data as our cost estimator, so the two always agree. The starting point is the median premium that Insureon, an online insurance agency, publishes for its small business customers (see its IT and software businesses cost page). We adjust it for the state using Insureon’s state medians, and show the band that Insureon’s own price distribution says most businesses fall in. Every figure is an estimate, not a quote. The full method and source list is on the estimator page.
Hiscox and software & IT businesses
Hiscox writes software developers and IT businesses, including solo developers and small teams. It quotes general liability, professional liability and business owner’s policies online, is rated A (Excellent) by AM Best, and sells in 49 states and DC (not Alaska). Its advertised starting prices, listed in the cost table above, are entry prices for the lowest-risk businesses within a trade, so compare them with the medians rather than treat them as a likely quote: where a quote lands depends on revenue, headcount, limits and claims history. A broker or independent agent can price the same cover at several insurers, which suits a business that wants more than one price.
Frequently asked questions
How much does software developer insurance cost per month?
A software or IT business of two to five people pays about $94–$188 a month for professional liability (E&O) nationally, or $1,128–$2,256 a year. General liability runs about $25–$49 a month, and a business owner’s policy bundling the two costs about $28–$55. A solo developer pays nearer $94–$110 a month for professional liability.
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.
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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.