Technology
Professional Indemnity Insurance for Software Companies
Software companies carry liability for defects, downtime and errors in the products they build and operate. Professional Indemnity covers claims that a software defect or service failure caused client loss.
Why it matters
Why software companies need Professional Indemnity
- Enterprise client contracts increasingly mandate adequate PI cover.
- Software defects can cause significant downstream business interruption for clients.
What does Software Company PI cover?
- ✓Claims arising from alleged software defects or service failures.
- ✓Defence costs in responding to professional negligence claims.
Common exclusions
- –Cyber events such as data breaches — need Cyber Liability cover.
- –Deliberate or fraudulent acts.
Real scenarios
Common Software Company PI claims
Product defect claims
Claims that a software defect caused client business interruption or loss.
SLA breach claims
Claims linked to failure to meet contracted service levels.
How much PI cover does a software company need?
Limits should reflect largest client contract value and any client-mandated minimums.
What affects the premium?
- Annual turnover
- Product type (SaaS, on-premise, platform)
- Largest client contract
- International exposure
- Claims history
What information insurers require
- • Annual turnover
- • Product description
- • Largest client contract
- • International exposure
- • Claims history
Retroactive cover
Retroactive date should reflect when the product was first released or cover first held.
Run-off cover
Run-off cover matters on acquisition, merger or wind-down.
FAQ
Frequently asked questions
No — Cyber covers data breach and network security events, while PI covers liability for defects and errors in your product or service. Most software companies need both.
Get your Software Company PI quote
One simple online application, tailored to how software companies actually work.
Related professions
Related covers
- Cyber Liability →
Covers data breach and network security exposure.
- Directors & Officers Liability →
For company directors.