Whether you design websites, develop apps or build corporate ERP systems, unfortunately insurance is just cost of doing business. If you’re a single developer, a small startup or an established software company, the liability risks for software companies is too great to leave your protection up to chance. Writing, updating and testing software requires attention to detail. A single error could mean losses for your clients who may choose to pursue legal action to cover those losses. Software company insurance can cover client losses and the legal costs of answering a statement of claim filed against you, your employees, subcontractors and/or your company – real and unexpected costs your company would have to pay even if the claim is completely frivolous.
Potential Liability Risks Software Company Insurance Can Protect You From
Software companies face unique risks. Below are some potential liability examples software company insurance was made to address:
- Software/app launch delays that cost a company money in lost revenue
- Errors that cause a client’s system to go offline and lead to losses
- Claims of copyright infringement and/or intellectual property theft by other software companies like the notable Supreme Court case between Oracle and Google
- Software that doesn’t meet a client’s expectations
- System design errors that lead to lost productivity
- Errors that leave a client’s system vulnerable to a breach or to their records being exposed
Remember that a client can claim any of the above and whether it’s true or not, your company would have to pay out-of-pocket to defend itself against that claim. Software company insurance, as stated above, can cover client losses should you make an error or omission and can also cover the costs of legal proceedings including:
- Lawyer’s fees and the costs your company would have to pay to properly defend itself at trial
- Lost revenues your company may face for time spent answering allegations at hearings or court
- Costs to settle a claim against your software company
- Money awarded by the court after a trial has been concluded
Your basic software company insurance should protect your software company from errors you may make but software companies also face other potential losses.
Comprehensive Software Company Insurance ALIGNED To Protect Your Software Company
Running any type of business means facing risks. Managing those risks is what sets successful businesses apart from the rest. Protecting your software company from devastating losses that could bankrupt your company is the first step to keeping you on-line. Below are other coverages that can be added to your software company insurance and that no software company should be without.
Commercial General Liability Insurance is a staple for all commercial enterprises. It protects businesses from legal claims of personal injury, property damage, false advertising, libel/slander and more. If a client is injured while on your property (or you injure them on their property or anywhere else) or if a pedestrian crossing in front of your business slips and falls on ice and injures themselves, your software company could be facing costly litigation.
Cyber Liability & Privacy Insurance for your software company only makes sense. With the amount and type of information stored on your computers and other devices, your software company is a desirable target for cybercriminals. Cyber liability cover in a software company insurance plan can cover the costs of a breach including losses sustained by parties affected by a breach, costs to repair systems and data and notification costs.
Crime Insurance / Fidelity Insurance can protect your software company from the losses your company could face if an employee uses his/her position and access to sensitive information to commit fraud – among other potential losses due to crime.
Property Insurance protects businesses by providing coverage in the event of perils like fires, floods, sewage backups etc. The cost to repair the damage to your building and repair or replace your expensive equipment could end up being more than your software company can handle on its own. And if you run your software company from home, your home insurance policy may not cover your business equipment and other business assets stored at home. Make sure you check your home policy before deciding your home software company can do without commercial property coverage.
Employment Practices Liability (EPL) Insurance covers businesses of all sizes from claims workplace harassment, discrimination, wrongful termination and other employment practices-based suits.
Software Company Insurance ALIGNED by Business Insurance Specialists
Software company insurance needs to be responsive and customized as the programs and apps you develop. Use our online tool to get a quote on software company insurance in minutes or contact an ALIGNED advocate to discuss your software company insurance needs.
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