Insurance For Software Developers
Business Indemnity Insurance for Software Developers*
Suitable business and professional indemnity insurance for software developers may provide cover for professional indemnity and public liability cover under a combined policy.
For example, Business and professional indemnity insurance for software developers may include*:
Financial loss arising from software/system defects
Financial loss due to lost or corrupted data
Failure to perform and deficiencies
Breach of intellectual property
Personal injury or property damage resulting from a hardware/product defect
Inappropriate or incorrect advice leading to financial loss
Many Business Owners are UNSURE if they are COVERED PROPERLY.
We help them find affordable and SUITABLE INSURANCE so they can run their business with CONFIDENCE.*
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- Suitable Cover
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Why do software developers need business and professional indemnity insurance?*
Software developers need business and professional indemnity insurance to cover for the following business risks:
- Contractual Liability
- Breaches of consumer protection legislation
- Damages caused by faulty software or hardware
- Inadequate support for your software applications
- Business interruption
- Data loss
- Product Recall
- First Party Data Recovery
- Damage and destruction of documents
- Cover for subcontractors
- Data migration issues
Note that software developers can be held liable for the advice or the services they perform that may cause financial loss to a third party. As a result software developers need professional indemnity insurance.
Furthermore, Public Liability insurance is a core cover for all Australian businesses – including for software developers – to cover you against damage to a third person or their property.
What type of software developers need business and professional indemnity insurance?*
All software developers that charge a fee for advice or a service need business insurance and professional indemnity insurance.
For example, any software developers performing the following development services need business insurance and professional indemnity insurance.
- Applications Development– Designing and coding software which is used by humans to solve a particular practical problem. Common application development languages include Java, Visual Basic, VB.NET, and C#.
- Systems Development– Designing and coding software which works behind the scenes. Common systems development languages include C and C++.
- Web Development– Designing and coding applications which are housed in a Web browser. Common web development languages include HTML, VBScript, PHP, JavaScript, VB.NET, and C#.
- Test Automation– Designing and coding software which tests other software. Common test automation languages include Perl, Visual Basic, VB.NET, and C#.
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How much does Software Developer business and professional indemnity insurance cost?*
For many self-employed sole proprietor software developers combined professional indemnity and pubic liability insurance policy start from $680.
Software developer business insurance cost: from $680 for $1 million professional indemnity PLUS $5 million public liability insurance.
Please note : pricing may vary significantly from the above based on your size, clients, experience and specific software developer business activities.
For a software developer professional indemnity and public liability insurance cost for your business TALK to a SMART Business Insurance broker on 1300 542 573
Why should software developers use an insurance broker?*
If you are a software developer deciding on whether to use an insurance broker for your business and professional indemnity insurance it is important to consider that brokers act in the interests of the small business owner. Direct insurers and agents act for the insurer. This can be important especially if you need to claim.
Brokers can help software developers by sourcing competitive quotes on policy inception, negotiate with the insurance companies to prevent or limit increases on renewal, remarket your policy to other suitable insurance companies where appropriate, talk to underwriters about policy wordings, industry classifications and terms, talk to insurance assessors during the claims process and repairers where necessary.
How do I get a Software Developer Professional Indemnity Insurance broker quote?*
Depending on the nature of your software developing activities, the size of your projects , the size and type of clients you service and whether you are a sole trader, or employ staff or sub-contractors , different insurance companies and underwriters are likely to provide suitable and affordable cover.
For a suitable and affordable business and professional indemnity software developer insurance quote TALK to a SMART Business Insurance broker on 1300 542 573 or contact us online.
Is professional indemnity insurance a legal requirement for software developers in Australia?
It is not a legal requirement, however may sometimes be required by contract.
Does the policy cover work done for overseas clients?
If the overseas clients are disclosed, the territorial/jurisdictional limits extend, and there are no applicable exclusions, then work for overseas clients would be covered.
What’s generally excluded from software developer indemnity insurance?
Cyber can be excluded in some cases. Non IT-related services, contractual liability and issues pre-dating the inception of the policy are also generally excluded.
I’m a freelancer/contractor, not a company — do I still need cover?
Sole traders can still be held liable for the work they do, so if you are concerned about being held liable for your services and would prefer not to settle or incur legal expenses out of your own pocket, then you would need cover.
How quickly can I get a policy in place?
For simple risks, we may be able to arrange cover on the same day. More complicated risk can take a few days to a week or two.
AI & Emerging Tech
Does my policy cover claims arising from AI-generated or Copilot-assisted code?
If disclosed, noted in the schedule, and not excluded by the wording, then cover can extend.
Am I covered if a client’s system fails because of a machine learning model I built or trained?
If disclosed, noted in the schedule, and not excluded by the wording, then cover can extend.
Does insurance cover liability from chatbots or automated decision-making tools I develop?
Tools that automate decision-making are generally a non-preferred risk for underwriters. If the tool has controls in place where the final decision is always being made by the user, they may be able to offer cover.
Open Source, IP & Ownership
Am I covered if a project I built relies on vulnerable or defective open-source libraries?
In general, if the consequence has to do with functionality, then it would be covered under professional indemnity insurance. If the consequence has to do with data breaches, then it would be covered under cyber insurance.
What happens if a client disputes ownership of code or IP after project completion?
Would not expect this to be covered under a professional indemnity insurance policy. Contractual disputes may be covered under a Commercial Legal Expenses insurance policy.
Does the policy respond to allegations that my code infringes a third party’s patent or copyright?
If it has a section for intellection property rights infringement, then it can respond.
SaaS & Product-Specific
Is there a difference in cover between building bespoke software and operating my own SaaS product?
If you are contracted to purely build software, the professional risk would primarily (or entirely) be IT-related. If you are operating your own SaaS, depending on what kind of SaaS it is, the risk can be varied (e.g. a compliance review and auditing SaaS would have a risk of the audits being incorrect, which falls outside of IT).
Does the policy cover downtime or SLA breach claims from SaaS customers?
Cyber incidents resulting in downtime may be covered under cyber insurance.
Am I covered for app store rejections, removals, or compliance issues (Apple/Google policies)?
Depends on what the loss is. If it is loss in income for not being able to sell a digital product, this generally would not be covered.
What if a security vulnerability I introduced leads to a client being breached or fined?
Depending on the circumstances, it could be considered either a cyber or professional indemnity insurance claim.
Contracting, Structure & Subcontractors
Do I need different cover if I work through a platform like Upwork, Toptal, or a labour-hire/umbrella company?
This would depend on the terms of the platform or umbrella company.
Am I covered for work I subcontract to offshore developers?
Most professional indemnity policies have a benefit for vicarious liability, which covers you for the work of your contractors.
If I incorporate (Pty Ltd), do directors need separate Directors & Officers cover on top of PI?
If you are concerned about being held liable for committing wrongful acts as a director, then yes; this is not covered by professional indemnity insurance. Otherwise, if you are purely concerned about the professional exposure from your services, then no; professional indemnity still covers the work done by the directors under the company.
Does cover extend to unpaid or personal/side projects, or only paid client work?
Only paid work; the cover is for issues arising from your professional services.
What’s the difference between “claims-made” and “occurrence” policies, and why does it matter for developers?
Claims-made policies cover you only when the policy is active. Once the policy expires, you can no longer claim. Occurrence based policies allow the policyholder to submit a claim after the policy expires, provided the incident occurred during the period of insurance.
If I stop trading or close my business, am I still liable for past projects — and do I need run-off cover?
You can still be held liable for past projects, and if you wish to be covered for such work then you would need run-off cover.
If I switch insurers, does my new policy cover work I did before the switch (retroactive date)?
The retroactive date can be matched (and thus prior work can be covered) if you have held continuous cover up to the date of the new policy.
Do larger enterprise clients typically require higher indemnity limits than the standard $1M/$5M package?
This would depend on the contract requirements , business activities, and risk appetite of the client.
