Computer Programming Business Insurance

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Contributor, Benzinga
November 24, 2020

If you own a software development or computer programming business, you might assume that you don’t need commercial business insurance because you work in a relatively low-risk industry. But, an expensive lawsuit can be brought against a business in any type of industry — and if you don’t have a comprehensive insurance policy, you could be left to face it alone. Even a small lawsuit can quickly total thousands of dollars in attorneys’ fees, so protecting yourself and your employees with insurance is a must.

Our guide to commercial business insurance options for computer programming business owners will help you understand your coverage options. We’ll also introduce you to a few of our favorite business insurance providers offering policy options for those in the programming business. 

Best Computer Programming Insurance

As a business owner, you’ll have your choice between a wide selection of insurance providers. If you aren’t sure where to begin your search for the best insurance coverage, consider beginning by getting a quick quote from a few of our favorite providers listed below.  

Try Simply Business

Simply Business offers a comprehensive suite of business insurance that specializes in making it easy to insure your business. Whether you’re looking for construction workers' insurance or insurance for your startup, Simply Business helps you find the right workers’ comp coverage at the right price. This includes computer programmers, repair businesses, independent IT firms, hardware support businesses, remote software support companies, etc.  

Tell Simply Business a little bit about your business and you'll get almost-instantaneous affordable quotes from top insurance providers to protect your business and safeguard employees if they’re hurt on the job. You can also look into business owner’s plans, liability insurance, commercial auto and more that will cover everyone on your team, and you can get covered in accordance with state law without overspending. 

Building your business is hard enough. Let Simply Business make it easier. Get a quote from Simply Business today.

Types of Computer Programming Insurance

There is no singular set of policies that constitute a computer programming insurance policy. Instead, you’ll be able to choose individual coverages that complement the unique structure of your business and your clientele. Below are a few of the most common coverages computer programming business owners use to protect their operations. 

General Liability Insurance

General liability insurance is a type of umbrella insurance policy that provides you with a range of protections against legal claims made against your business. Most general liability insurance policies include at least the following 3 types of coverages:

  • 3rd-party bodily injury: 3rd-party bodily injury coverage helps you cover legal expenses if someone sues you after being injured on your property. For example, if you operate a physical repair center, a customer might trip on a stray cord and sprain his ankle. If the customer decides to sue you for the cost of medical bills, your general liability insurance would come into play.
  • 3rd-party property damage: This coverage helps you cover legal expenses if you damage or destroy a client or customer’s property. Say an associate drops a laptop he’s working on and destroys it, the client can sue you for the cost of a replacement. Your 3rd-party property damage will help you cover the cost of legal expenses in this instance.
  • Advertising damages: Advertising damages protection helps you cover legal expenses brought against you as a consequence of advertising your business. For example, if you accidentally copy a competitor’s slogan and they bring you to court for copyright infringement, your general liability insurance will help protect you.

Keep in mind that general liability insurance only extends to lawsuits brought against your business. It won’t help you cover the costs of bringing a lawsuit against a client or competitor. 

Commercial Property Insurance

Commercial property insurance is a type of protection that compensates you for damage done to your commercial space. Commercial property insurance is similar to homeowners insurance because it helps you cover the cost of repairs from a set of covered perils included in your policy. Some examples of commonly covered perils include:

  • Robberies and theft
  • Fires
  • Damage from electrical storms

Also like homeowners insurance, commercial property insurance policies also include a list of perils that are excluded from coverage. Some common examples of excluded perils include earthquakes and floods. If you operate your business from an area where these excluded perils are likely to cause damage, your insurance provider could allow you to add an additional supplementary coverage for a few extra dollars per month to extend your coverage. 

Business Owners Policy (BOP)

If you’re considering purchasing both general liability insurance and commercial property insurance, you might be able to supplement both coverages with a business owners policy (BOP). A BOP is a singular type of policy that combines both of these coverages together into a single policy from 1 insurance company.

Most business owners prefer to purchase a BOP over individually selecting a general liability and commercial property insurance policy because it makes it easier to pay their premiums. Insurance companies also offer discounts to business owners who select a BOP for their coverage.  

Errors and Omissions (E&O) Insurance

Sometimes referred to as “professional liability insurance,” errors and omissions insurance compensates you if a customer decides to sue you for substandard work. Imagine that your company creates a new website for a client that includes a payment processor. The client implements the new website and payment processor, only to suffer a data breach that affects her customers. The client could potentially sue you for the cost of both the creation of the website and anything she spent repairing her company and informing clients after the data breach occurs.

In this instance, your E&O insurance would help you cover the money you spend defending your business in court, as well as any court-awarded judgments you must pay to your former client. Some other examples of situations that might warrant the use of your E&O insurance include:

  • Delivery of late or buggy software that impacts a client’s business operations
  • Errors in software code that force a client to temporarily shut down the business
  • Delivery of payment processing software that provides customers with discounts not approved by the business owner

A comprehensive E&O policy is a must-have for computer programming businesses, as the cost of lawsuits associated with data breaches can quickly reach thousands of dollars. 

Cyber Liability Insurance

Another absolute must-have for computer programming business owners, cyber liability insurance protects your business from expenses associated with a data breach on your company. Most cyber liability policies include 2 forms of coverage:

1st-party coverages: 1st-party coverages help you pay for expenses associated with repairing and restoring your business following a hack or data breach. Some examples of things that your 1st-party coverage can help compensate you for include:

  • Costs associated with informing customers that their data was compromised
  • Expenses related to investigating the cause and perpetrator behind the data breach
  • Anything you spend repairing or replacing computer equipment damaged by the breach
  • Credit monitoring services if your own personal information was also compromised

3rd-party coverages: 3rd-party coverages compensate you for legal expenses brought against your business by clients and customers affected by the data breach. Some instances when 3rd-party coverage might come into play include:

  • Attorney’s fees if a client sues you, claiming the breach could have been prevented
  • Coverage for any court-awarded judgments levied against your business as a result of the hack
  • Regulatory fines and fees you’re forced to pay following a local or federal investigation into the data breach

Though specific policy inclusions will vary by insurance provider, you can expect a comprehensive cyber liability insurance policy to compensate you for both immediate expenses you incur after a data breach as well as long-term damages brought by clients. 

Cost of Computer Programmer Insurance

The specific price that you’ll pay for your computer programming business insurance will vary depending on a range of factors, including:

  • Your policy coverage limits: Like most types of insurance, business insurance policies include limits that cap the amount of money you can claim from your insurance policy on a per-incident and annual basis. The higher your coverage limits, the more you’ll pay each month for insurance.  
  • The type of client data you store: If you store important client information (like payment processor data or personal information) you’re more likely to be the target of a data breach. Storing sensitive information increases the price you pay for insurance coverage.
  • The size of your business: The more employees and clients you have, the more likely you are to make a costly mistake that results in legal action. Expect your insurance expenses to increase as your business grows.

As a general rule, computer programming business owners can expect to pay between $27 and $39 per month for a general liability insurance policy. Additional policy types will vary depending on the unique composition of each business.

How Computer Programming Business Insurance Works

The term “computer programming insurance” doesn’t refer to a singular type of insurance policy in the same way that “car insurance” or “health insurance” does. Instead, it refers to a selection of coverages that computer programming business owners typically use to protect their businesses against legal threats brought by clients and customers.

If you operate your business from a physical location outside of your home, we recommend purchasing both a general liability insurance and commercial property insurance policy. You may be able to combine both types of coverage together with a single BOP. We also recommend you carry comprehensive E&O and cyber liability insurance coverage, especially if you store sensitive client data on your servers. 

Protecting Your Business Against Threats

Business insurance helps protect your company against the potentially devastating costs of a lawsuit brought against you by another company or a competitor. If you don’t already have a business insurance policy, take some time to collect a few quotes from our favorite insurance providers offering comprehensive policies for computer programming businesses. We also recommend that you review your coverage options on an annual basis to ensure that you’re not overpaying for your policy.  

About Sarah Horvath

Sarah is an expert in the insurance, investing for retirement and cryptocurrency space.