Professional indemnity insurance for software developers
Software developers are familiar with the sensibility of regularly backing up their work therefore when it comes to professional indemnity insurance software developers shouldn’t think twice.
Our guide to insurance for software developers
How important is insurance for software developers?
You back up your work to minimise the risk of mishaps or lost data and you need to take the same approach to your own business protect your livelihood and reputation.
There are many reasons that a case could emerge as a result of your work - everyday if fact if you’ve been writing code for the last few years. Regardless of whether you have done it purposefully, a few things can happen that can make a client troubled and make them sue you.
Copyright encroachment, digital assaults because of a weakness, property harm to a clients property while you are working (for example espresso spilled on a PC), coding blunders, and inability to finish your task on time are only a portion of the things that can be guaranteed by a miserable client.
These are just some examples of the most common claims against software developers by dissatisfied clients. Try not to have a critical monetary misfortune by investing in quite possibly the main business insurance type - professional Indemnity insurance - which is there to protect you from accusations of wrongdoing, mistakes and other professional errors.
The story of a delayed error riddled project
For this to be a genuine guide to help you decide whether you should consider professional indemnity cover, we can offer an example of a product engineer who entered into a contract with a client to develop a tech capability for the client’s business.
The contractor didn’t finish the project within the two time frame plus what had been delivered showed a number of slip-ups. At least that was what the client claimed before they walked away from the contract and recruited another developer to finish the product. On top of that the client sued the original contractor for breach of contract and demanded that all of the investment was refunded, by then amounting to some £600,000.
On the off chance this happened to you and you didn't have professional indemnity insurance in place, would you have the means to defend yourself against the lawsuit, would you have the reserves to compensate your client if found liable?
What else should form part of business insurance for software developers?
There are two aspects to consider as a software developer. Firstly, whether you’re working from your client’s premises or regularly meeting with them and their staff. Secondly, is the type of work you’re delivering prone to a cyber security issue.
Public liability insurance is an inexpensive insurance protection for unfortunate incidents such as damaged property of your client, your equipment causing someone to slip or fall. These claims rarely result in substantial claims but even a few thousands can make a hole in your pocket. In comparison you’ll pay about £65 a year not to have to worry about these risks.
Cyber insurance is a very specialised product and even though some professional indemnity covers include a little element of it, it’s unlikely to be enough for your line of work. If your work is exposed to risks of cyber crime, look for a cyber insurance specialist. Buying it online as an add-on with your liability insurance is risky. As a software developer you understand how complex this issue is, and often impossible to explain easily to a third party. You’ll need your insurer to have the experience, knowledge and resources to assist you. While Suited doesn’t sell cyber insurance, we can point you in the right direction.
Common Questions
What type of software contractor liability insurance do I need?
Professional indemnity is a must for software developers, public liability insurance is useful if you’re in contact with your client, their staff and premises and cyber insurance is advisable especially if your work is cyber crime sensitive.
Can I insure my past work?
With Suited you can provided you’re not aware of any circumstances that might lead to a claim.
Will the work of my subcontractors be covered by Suited?
Suited professional indemnity does cover the work you have subcontracted but you must not waive your right of indemnity against those subcontractors.
What if I’m in between contracts?
With Suited you can switch the holiday mode on which means you’ll stay insured for the past under your professional indemnity insurance while paying a lot less.
Covers we offer
Suited small business owner and freelancer insurance starts with professional indemnity. It’s our core cover. With that you can also get public liability and a couple of other helpful insurance add-ons for a solid protection of your business.
Recent articles
What does ‘hibernate’ mean in professional indemnity insurance?
Imagine you’ve just delivered the last piece of work for your client and plan to take some time off, perhaps for good. Cancelling your professional indemnity cover is an option but not a very good one. The work you did in the past may still catch up with you in the future and since professional indemnity insurance (PI) works on a ‘claims made basis’, you won’t be able to access its benefits unless you have an active PI cover in place.
What is a retroactive date in professional indemnity insurance?
A retroactive date is a line in the sand which determines a specific point in the past from which your insurers have agreed to insure your business. You are effectively allowed by some insurers to backdate your professional indemnity (PI) cover so that your business is protected against possible claims as a result of your past work.
Is professional indemnity insurance the same as public liability insurance?
In short, no. It isn’t. Professional indemnity and public liability insurance are both legal covers, meaning you’re protecting yourself and your business against legal threats from clients and third parties. However, there are subtle differences and whether you need one, the other or both does depend on your business activities.
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