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IT / Software Services Insurance Cost

GL costs and coverage options for an IT or software services firm.

Jessica Martinez
By Jessica Martinez, Contributing Writer, Business & Finance
Updated July 8, 2026

IT and software firms typically pay from about $450/year for general liability insurance. The work is primarily desk-based, so the physical exposure a GL policy prices for is minimal.

How the IT / Software Services GL Premium Is Calculated

BizInsuranceCost builds the number from your revenue times an industry risk factor, with a limit factor layered on top for the coverage amount chosen. For an IT or software services firm, that industry factor lands at roughly 1.1x the base office rate, which is how the $450/year figure gets built. Feed your own firm's revenue into the GL cost calculator to see the same math run.

Where the Exposure Actually Sits

GL will not cover a client's losses from a system outage or faulty code, those are professional failures, not bodily injury or property damage. Errors and omissions insurance is the separate policy that firm actually needs for that exposure, and most enterprise clients require it in the contract.

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FAQs

Why is GL so inexpensive for IT and software firms?

Because the work is primarily desk-based, so the physical exposure a GL policy prices for is close to nothing. IT and software firms sit at roughly 1.1x the base office rate, near the bottom of the scale.

Does GL cover a client's losses from a software bug or system outage?

No. That's a professional failure, not bodily injury or property damage, so it falls outside GL entirely. Errors and omissions insurance is the policy built specifically for faulty deliverables and outages, and most enterprise clients require it in the contract.

Will a client actually require proof of GL for a software contract?

Frequently, yes, alongside proof of E&O and sometimes cyber liability. Enterprise procurement teams often have a standard insurance checklist regardless of how low the physical risk actually is for a given vendor.

Should a solo developer bother with GL at all?

Many do, mainly to satisfy client contract requirements rather than because the physical risk is meaningful. If your clients are individuals or small businesses that never ask for proof of coverage, it may be a lower priority than E&O.

Jessica Martinez
About the author
Jessica Martinez
Contributing Writer, Business & Finance, Encore Editorial

A former credit analyst, Jessica Martinez turns dense financial paperwork into something you can actually use. She holds that a number without a source is just a rumor wearing a tie.