A software development insurance policy is a vital piece of your ongoing business cost as a software developer. What are the benefits of purchasing a software development insurance policy? And who will benefit from a good software development insurance policy? That's what we'll explore below.
A good software development insurance policy is beneficial for any business that creates or uses digital assets. Even if you don't consider yourself a software developer, you make digital assets daily. Websites, mobile apps, online services, and social networks – everything online comprises digital assets. Therefore, if your business uses digital assets, you should consider purchasing a software development insurance policy.
Who will benefit from a good software development insurance policy?
Your business will benefit significantly from a software development insurance policy because it will protect you from litigation if something goes wrong with a piece of software that you create. It covers your liability for any bugs or errors in your software, and it also helps you in the case that you need to remove some code quickly (say, because a security hole was exposed).
You protect your business from litigation by having a software development insurance policy.
A good insurance policy will also help you manage risk when building software. This means that your insurance policy will help you mitigate and manage risks to your business. But how did we end up in such a situation?
How do we get into risky situations?
The reality is that many software development companies are now developing software for "mission-critical" applications. They are working on the application quickly, without any plan in place to test the software. It's called "mission-critical" because if something goes wrong with the software, something could go drastically wrong and wreak all kinds of havoc.
What's the risk if something goes wrong with that software?
Say you write code for your website, and a bug is introduced into that code. If the bug is not found and fixed, hackers could gain access to your website or even gain access to personally identifiable information from your client's users. This would put your business at significant risk.
If this happens, who is liable for the losses?
It depends on whether you have insurance or not. If you don't have insurance, then it's likely that your company will be held liable for the losses. On the other hand, if you have a good insurance policy, it would protect your company from claims and help you to solve the problem.
The insurance company will pay for litigation, remediation, and other costs related to your incident. It's not unheard of to see policyholders with more than $100,000 of defense costs covered by a large insurance company.
You are the one liable if you don't have insurance
If you don't have insurance, then you are most likely liable for any losses stemming from your negligence. This is typically a horrible legal case. If you are found responsible for any claims, the judge will most likely put a lien on your assets and either order your company to pay or give the money back to the client affected by your software.
What are the risks of not having a software development insurance policy?
If you develop software for a business or your own business and do not purchase insurance, you will be liable for any losses your software causes. For example, if a bug is introduced that causes people to lose money they have invested in your software, or if someone has to pay for wrong information entered into the system, you most likely will need to shell out money as a business.
As you can see, the Business Insurance for Software Developers and Programmers benefits are numerous. If you're operating in this space, getting insured is a must to protect the future of your business and those who work for you.