How much do app developers pay for business insurance?

App developers spend an average of $68 per month, or $810 yearly, for technology errors and omissions insurance. This coverage combines errors and omissions insurance and cyber insurance into one policy, often costing less than buying each of these coverages separately.

Also known as professional liability insurance, E&O insurance protects small businesses against claims of professional negligence. For example, the push notification for a newly developed Android or Apple app might cause a client's cellphone to malfunction, resulting in a lawsuit.

Tech E&O includes third-party cyber insurance with this coverage, which adds extra protection in case your app unintentionally causes a data breach or cyberattack at a customer's company.

Below is the average E&O insurance policy for app developers who buy from TechInsurance:

Insurance premium: $68 per month
Policy limits: $1 million per occurrence; $1 million aggregate
Deductible: $2,500

The cost of errors and omissions insurance is based on many factors, including the policy limits you choose, the types of apps you create (e.g., car insurance apps, insurance mobile apps, etc.) and your claims history.

App developers spend an average of $170 per month, or $2,041 annually, for cyber insurance. Also known as cyber liability insurance or cybersecurity insurance, this policy helps pay for the cost of complying with your state's data breach laws.

A cyber insurance policy can cover expenses related to a data breach or cyberattack, including legal fees and customer notification costs. It is especially crucial for companies that store personal customer information, such as credit card numbers or Social Security numbers.

The cost of cyber insurance primarily depends on the amount of sensitive information you handle at your app development business.

App development startups spend an average of $29 per month, or $350 per year, for general liability insurance. Though usually not required by law, a general liability policy may be needed in order to sign a lease or work with some clients.

General liability coverage protects your small business from common third-party risks, such as customer property damage or bodily injury. It also pays for lawsuits related to copyright infringement and defamation, including slander and libel.

For example, if a competitor claims that an employee at your app development company made a disparaging statement about them on social media and decides to sue, a general liability policy would pay for any legal costs.

Below is the average general liability insurance policy for app developers who buy from TechInsurance:

Premium: $29 per month
Policy limits: $1 million per occurrence; $2 million aggregate
Deductible: $500

If your business is small and low risk, TechInsurance's licensed agents usually recommend a business owner’s policy (BOP). A BOP bundles general liability insurance with commercial property insurance at a lower cost than buying these policies separately.

For app developers, the average cost for a business owner's policy is $50 per month or $598 per year. To protect against financial losses due to a forced closure, such as from a fire or flooding, you can also add business interruption insurance to a BOP.

The cost of general liability insurance is based on several factors, including the types of services offered (e.g., UX design, app store development, etc.), policy limits, size and location of your business, and any subcontractors or additional insured endorsements you may have.

The average cost of a fidelity bond is $110 per month, or $1,316 annually, for mobile app development businesses. Some clients, especially those in the financial services industry, may mandate a bond in order to sign a contract with them.

Fidelity bonds, a type of surety bond, protect your clients by reimbursing them in the event your employee commits theft, fraud, or forgery. This include illegal electronic funds transfer and unapproved credit card purchases.

The cost of a fidelity bond is a certain percentage of the total bond amount. Unlike most insurance policies, this amount must be paid back to the company that issued the bond.

App developers spend an average of $32 per month, or $386 annually, for workers' compensation insurance. To comply with state requirements and avoid penalties, app development businesses with one or more employees typically are required to purchase this policy.

Workers' comp coverage pays for medical expenses and disability benefits when you or an employee suffers a work-related injury or illness. For example, if an app developer at your company develops carpal tunnel, a workers' comp policy would pay for their treatments and lost income while they recover.

Workers' compensation coverage also often includes employer's liability insurance, which pays for defense costs and other legal fees in the event of a lawsuit related to workplace injuries.

Even though workers' comp may not be required for sole proprietors or independent contractors, it is highly recommended since most health insurance plans can deny claims for injuries that occur at your jobsite.

The cost of workers' comp is based on several factors, including the number of employees you have and their occupational risks.

Technology companies spend an average of $198 per month, or $2,375 yearly, for commercial auto insurance. Almost every state requires this type of insurance if your app development business owns any company vehicles.

If your business vehicle(s) are involved in an accident, a commercial auto policy would help cover property damage costs and any medical expenses. This coverage also helps pay for costs related to vandalism, weather damage, and theft.

To protect personal, rented, and leased vehicles used for business purposes, you'd need hired and non-owned auto insurance (HNOA) instead.

The cost of commercial car insurance depends on many factors, including your employees' driving records, policy limits, the number of vehicles you own and their value, and your coverage options.