The software development industry includes all computer technology experts who alter, write, support, and test software of any kind. The software has become so crucial that most modern businesses rely on it to run.
While running a software development business is lucrative, it has a wide range of risks. This is why you need software developer insurance that protects you against a wide range of risks.
To enlighten you on the importance and benefits of this insurance policy, we will discuss what it covers and why your software development business needs it.
Software Developer Liability Insurance
Software developer liability insurance covers IT professionals and contractors operating within the software development industry. Whether you are customizing off-the-shelf software or building new apps, software engineer insurance protects you every step of the way. This policy covers you against a wide range of claims that could otherwise result in severe financial losses.
Generally, clients have high expectations from software developers, given your knowledge and expertise. They expect you to use these skills to deliver high-quality products and on time. However, if you deliver a product that doesn’t meet the standards required by your client, they might file a claim against you for losses and other damages.
Without software consultant insurance, you will have to defend yourself against these claims from your personal finances. This can be costly given the many expenses that come with a lawsuit.
What It Covers
Software business insurance covers a wide range of claims. Here are some of them;
Many people and industries rely on software to run their businesses. This means the demand for software development is incredibly high. While that might be good for your software development business, it increases the risk of lawsuits. For instance, any downtime could result in your client losing money.
As a result, they file a claim against you for damages. Furthermore, if you fail to meet your deadline and inconvenience your client, they have the right to sue your software development business for damages. Software engineer insurance covers against such claims and protects your business against possible losses.
In modern technology, cybercrime is on a significant rise. Most hackers target software development companies because they handle sensitive information that could be valuable. Cyberattacks and data breaches could lead to useful information, such as credit card and social security numbers being compromised.
This leaves your business open to severe litigation. Furthermore, damage caused by cybercrime to third-party services or software could result in a lawsuit. This is why you need software developer insurance that covers such claims.
There is extreme competition in the software development industry. With many software development companies offering similar services and focusing on the same demographics, avoiding intellectual and copyright infringement can be challenging.
Even when you are doing honest work and are not infringing on anything, competitors could still claim you have! Having insurance for software companies protects you against such claims and helps maintain your company’s good reputation.
When your software development business is based in a commercial building, there are chances that your work equipment could be damaged by vandalism, weather events, fires, or burglary. You also can’t rule out the possibility of an employee accidentally spilling coffee on your server and damaging it.
All these events or mishaps will result in the need for equipment repair or replacement. Software development equipment is costly, and getting that money out of your pocket could affect your business significantly. This is why you need software business insurance that protects you against such cases.
Employees have access to sensitive and valuable customer data in the software development business, making it tempting to steal. Besides, given that software development is based online, many hackers look for ways to bypass security systems and steal data, cash, and other valuables.
In case of theft, your clients will sue for losses. Without software engineer insurance in place, you will have to defend yourself against these claims using money from your pocket. This could result in severe financial losses.
Recommended Coverage for Software Development Businesses
With the significant growth being experienced in the software development business, the complexity and number of insurance coverage required will change. Whether you are an independent software developer with a few employees or an established software development business, here are some of the recommended insurance policies you should consider.
Commercial General Liability Insurance
It goes without saying that any business owner should have commercial general liability insurance. This is an essential insurance policy that protects your business from property damage and third-party bodily injury. For instance, this insurance policy covers their medical expenses when a client visits your office and accidentally stumbles on wires and suffers an injury.
Besides, if the client decides to file a claim against your business, general liability insurance covers all the legal expenses. Some of the other areas covered under this insurance policy include slander, libel, defamation, and invasion of privacy. Therefore, it is a good idea for your software development business to get this insurance policy.
Technology Errors & Omissions Insurance
This is one of the most vital insurance policies you can get for your software development business. Technology errors and omissions insurance covers your business if the professional services you offer cause losses to your customer.
For instance, you might develop software that fails to meet the standards and results in severe financial losses for your client. In that, the client might file a claim against you for losses and related damages.
This insurance policy also addresses claims arising from failure to deliver protection on time. Furthermore, it addresses errors in the system or codes you develop for your client. In case of such errors, your client has the right to sue you for damages.
That is why you need a solid insurance policy that protects your business. Operating without software engineer insurance puts your business at risk of serious financial losses. You will have to cater for all the expenses and pay off court settlements. This could leave your business in financial limbo.