Professional Indemnity Insurance for Tech and Software
Tech professionals face unique risks: software bugs, IP disputes, data breaches, and SaaS liability. Standard PI often excludes tech-specific risks; you need tailored cover.
Do Software Developers Need PI Insurance?
Not legally mandatory, but increasingly required by enterprise clients in contracts. If you build software for others, errors can cost clients £10k-£1m+. A single bug causing business interruption or data loss creates liability. Freelance developers building for SMEs should have PI; agencies with 5+ employees almost always do. Cost is £200-800/year for solo developers.
SaaS and Cloud Liability Risks
SaaS businesses face liability for service outages, data loss, and security breaches. Standard PI often excludes these—you need cyber and errors & omissions cover. If your SaaS platform goes down for 24 hours, clients can claim £50k-£500k+ in lost revenue. Your SaaS contract almost certainly includes liability caps; ensure insurance matches your contractual exposure.
Intellectual Property Disputes
Tech firms frequently face IP claims: 'You copied our code,' 'That patent is ours,' 'You violated our copyright.' Standard PI doesn't cover IP infringement liability. You need separate IP insurance or contractual indemnity language. Cost is 15-30% premium on top of standard PI. For startups using open-source, document all licenses—non-compliance exposes you to massive liability.
Cyber Liability vs. Professional Indemnity
PI covers your negligent advice or work. Cyber covers losses from your systems being hacked (ransomware, data theft). A hacked client database is a cyber claim (you didn't secure it). You giving bad security advice is a PI claim. You need both: standard cyber (£300-1,000/year) plus PI (£200-1,000/year for tech professionals).
Data Breach and Privacy Liability
Handling personal data means GDPR liability. If you cause a breach (failed encryption, insecure API), you're liable for remediation costs, fines, and client losses. Standard PI and cyber cover different aspects. PI covers your negligence; cyber covers the breach itself. Both together provide full protection. GDPR fines (up to £20m or 4% revenue) aren't insured, but response costs and client claims are.
Contractor and Client Risk Management
Many tech firms subcontract work. Ensure subcontractors carry PI and cyber insurance naming you as interested party. Review client NDAs and liability terms—tech contracts often have unlimited liability (bad for you). Negotiate caps aligned with your insurance limits. Document all deliverables and scope in writing; scope creep is the #1 source of tech disputes.
Get PI Insurance Quote"A single security breach or IP claim can bankrupt a small tech firm. Insurance is non-negotiable."
— CTO, Enterprise Software
Frequently Asked Questions
No, that's cyber liability. PI covers your bad advice/work. Cyber covers the breach itself and costs to notify clients, restore data, etc. You need both.
Ensure all licenses are compliant (GPL, MIT, Apache, etc.). If you violate license terms, that's IP infringement, not covered by standard PI. IP insurance or legal review is essential.
Generally no. That's business interruption (client's issue) or service-level agreement (SLA) violation. You need cyber and errors & omissions cover for SaaS uptime liability.
Match your largest potential client loss or your contractual liability cap. Most SaaS carry £1-5m. Check your customer contracts for minimums.
£500-2,000/year for freelancers/small teams. £2,000-10,000/year for agencies with 5-20 staff. Enterprise software companies pay £10k-50k+ based on revenue and risk.