How much does business insurance cost for web developers?

Web development businesses spend an average of $68 per month, or $810 yearly, for technology errors and omissions insurance. This combined coverage bundles errors and omissions insurance and cyber insurance into one policy, often costing less than buying each coverage separately.

Also known as professional liability insurance, E&O insurance protects small businesses against claims of professional negligence. For example, a website designer's broken link in a website could cause the client financial loss, resulting in a lawsuit.

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

Below is the average E&O policy for web developers who purchase from TechInsurance:

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

Errors and omissions insurance costs for web developers are based on many factors, including the coverage limits you choose, the types of web services you provide, and your claims history.

Web development companies 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.

Cyber insurance covers 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 web development firm.

Web 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 insurance for web developers 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 advertising injury, including slander and libel.

For example, if a competitor claims that a web designer at your 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 web development firms that buy from TechInsurance:

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

If you have a small web design business and it's 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 web 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, business income, size and location of your company's business property, 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 web developers. 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 includes illegal electronic funds transfers 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.

Web development business owners spend an average of $32 per month, or $386 annually, for workers' compensation insurance. To comply with state requirements and avoid penalties, web development companies with one or more employees typically must 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 a web 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 expenses 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 numerous 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 web 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 legal 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.