Quick Answer: E&O insurance for software developers costs $75–$500+/month and covers code errors, project failures, IP infringement, and client financial losses. Every dev shop and freelance developer needs it. Get your developer E&O quote →

As a software developer, your code runs businesses. When something goes wrong — a bug causes downtime, a missed deadline costs revenue, or your software infringes on someone's IP — you could face a lawsuit. E&O insurance (professional liability) pays for your legal defense and any settlements or judgments.

Common E&O Claims Against Software Developers

Claim Type	Example Scenario	Typical Cost Without Insurance
Code errors/bugs	Bug in payment processing loses $50K in transactions	$50K–$500K
Project failure	App doesn't meet specs, client demands refund + damages	$25K–$200K
Missed deadlines	Late delivery causes client to miss product launch	$50K–$1M
IP infringement	Code uses open-source library with incompatible license	$100K–$2M
Data loss	Migration script deletes production database	$25K–$500K
Security vulnerability	Your code has a vulnerability that gets exploited	$100K–$5M

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Developer E&O Insurance Costs

Developer Type	Annual Revenue	Monthly Cost	Recommended Limit
Freelance developer	Under $100K	$75–$100	$500K–$1M
Small dev shop (2–5 devs)	$100K–$500K	$125–$225	$1M–$2M
Dev agency (5–20 devs)	$500K–$2M	$200–$400	$2M–$5M
Software company (20+ devs)	$2M–$10M	$350–$750	$3M–$5M

SaaS Liability: Special Considerations

If you build and sell SaaS products, your E&O exposure is different from project-based development:

Service availability: Downtime can trigger SLA-based claims from hundreds of customers simultaneously
Data handling: You're responsible for customer data security
Feature promises: Marketing claims about capabilities can create liability
Integration failures: Your API breaks a customer's workflow
Recommendation: SaaS companies should bundle E&O with cyber insurance and carry $2M+ limits

E&O + Cyber Bundle for Developers

Most tech E&O policies can be bundled with cyber insurance for comprehensive protection:

Coverage	E&O Only	Tech E&O + Cyber Bundle
Professional mistakes	✅	✅
Code errors causing client loss	✅	✅
Your data breach	❌	✅
Ransomware attack on you	❌	✅
Client data breach via your code	⚠️ Partial	✅
Breach notification costs	❌	✅

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Best E&O Carriers for Software Developers

Carrier	Best For	Starting Price
Hiscox	Freelancers, small dev shops	$75/mo
Beazley	Tech E&O + cyber bundle	$125/mo
Hartford	Bundling with GL/BOP	$85/mo
CNA	Mid-size agencies, higher limits	$150/mo

Open Source & IP Infringement Risk

Software developers face unique IP risks. Using open-source libraries with GPL, AGPL, or other copyleft licenses in proprietary code can trigger infringement claims. E&O policies with IP coverage protect against: