Web Development Business Insurance

Getting insurance for your web development business is essential.

This is because web development businesses need to be protected against a variety of different risks, such as claims that relate to contract violations, refunds, and employment law.

You will also want to protect your business’s assets against intellectual property right disputes, such as accidental copyright or trademark infringements.

We’ll help you find the most personalized and affordable coverage for your unique business.

Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.

Best Insurance for a Web Development Business

General liability insurance is — generally speaking — one of the most important insurance policies for web development businesses.

Some of the risks general liability insurance covers are:

Bodily injury
Property damage
Medical payments
Legal defense and judgment
Personal and advertising injury

Having said that, it is important to note that some businesses will not be fully covered with a general liability policy, and will also benefit from acquiring additional coverage, such as:

Commercial property coverage will cover the cost of repairing and/or replacing your business’s software, work computers, and office furniture in the event that it gets damaged or stolen.
Business income insurance will cover part of your lost income in the event that you are required to halt operations temporarily.
Workers’ compensation insurance will protect you against employee-related disputes, such as those that relate to disability benefits or bodily injuries.

You will also need to decide what type of business insurer you will use to get your coverage; there are two options available:

Traditional brick and mortar insurers: Reputable examples include The Hartford and Hiscox
Online insurer: Reputable examples include Next Insurance and Tivly.

All in all, we recommend going with an online insurer as a small business due to the fact that you should be able to find personalized coverage at a much more affordable rate. This is particularly because online insurers have significantly lower operating costs.

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Cost of General Liability Insurance

The average web development business in America spends between $400-$700 per year for $1 million in general liability coverage.

Compare the average cost of general liability insurance for a web development business to other professional industries using the graph below.

Several factors will determine the price of your policy. These include your:

Location
Deductible
Number of employees
Per-occurrence limit
General aggregate limit

You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy.

A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.

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Discover the best coverage at the lowest rate in our low-cost business insurance review.

Common Situations That General Liability Insurance May Cover for a Web Development Business

Example 1: A client brings some documents into the office and fails to notice the cables strung across the floor. He trips on them and falls, injuring himself and requiring medical attention. The fees for his medical treatment will be covered by your general liability insurance policy.

Example 2: One of your competitors determines that your new logo, which you have been using on all your latest marketing materials, is too similar to theirs. The competitor files a lawsuit against your company, demanding damages for copyright infringement. Your general liability insurance policy will pay for your legal defense as well as for a settlement if the case is decided out of court.

Example 3: One of your team members visits a client’s office for some hands-on guidance on how to maintain their website. While there, your employee knocks over a cup of coffee onto an expensive laptop, causing extensive damage. The general liability insurance policy you carry will pay for the replacement cost of the client’s equipment.

Other Types of Coverage Web Development Businesses Need

While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some of the most common types of coverage:

Commercial Property Insurance

Your web development work requires functional, current tech—which is costly to buy and costly to replace. If your computer equipment and other office equipment is damaged in an unexpected event, like a fire, a commercial property insurance policy would pay for the replacement of the equipment and other supplies. With your equipment replaced, you can quickly get back to serving clients and generating revenue.

Data Breach Insurance

The clients you work with entrust you with a lot of important information. Should that information become compromised by cybercriminals, the damage to the client can be considerable. Should the client take legal action due to the stolen user data, your data breach insurance will cover your legal fees. It will also cover the cost of paying a settlement if your case is settled out of court.

Workers’ Compensation Insurance

If your web development business has employees, workers’ compensation insurance will ensure that you are able to cover the costs of their medical care if they are injured while performing job-related activities. It also provides some coverage for lost wages if the employee is unable to work due to the injury. Workers’ compensation insurance coverage is required by most states for companies have part-time or full-time employees.

Home-Based Business Insurance

If you run your web development business out of your home, it is possible that your homeowner’s insurance will not cover accidents due to business-related activities. It is important to speak to the insurance provider of your homeowner’s policy to verify what kind of coverage you have related to your business. If your homeowner’s policy does not cover you, then you can get a home-based business insurance policy as part of a business owner’s policy or possibly as an extension to your existing homeowner’s policy.

Additional Steps To Protect Your Business

Although it’s easy (and essential) to invest in business insurance, it shouldn’t be your only defense.

Here are several things you can do to better protect your web development business:

Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
Set up an LLC or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
Stay up to date with business licensing.
Maintain your corporate veil.

Web Development Business Insurance FAQ

Yes, absolutely. You will need to first get a quote from an online business insurance provider like Next Insurance. Next allows you to then purchase a policy immediately and your coverage will be active within 48 hours.

A typical business owner’s policy includes general liability, business interruption, and commercial property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.

"Business insurance" is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.

Even if you aren’t required to, getting business insurance before you begin operating will mean that you will be adequately covered before you start interacting with clients, which can end up saving you thousands of dollars down the line.

Note: Some forms of coverage may be legally required if you own a company vehicle or hire employees.

Not necessarily. Certain exceptions may be written directly into your web development business insurance policy, and some perils may be entirely uninsurable.

Yes, an LLC is meant to create a legal barrier between your business and your personal assets and credit. If you haven’t formed an LLC yet, use our Form an LLC guide to get started.

An LLC doesn’t protect your business assets from lawsuits and liability– that’s where business insurance comes in. Business insurance helps protect your business from liability and risk.