App & Software Developers Coverage Guide
Custom software shops face client-loss E&O claims (the app crashed; we lost sales), IP infringement (you used a copyleft library), and SaaS uptime claims under SLAs. Tech E&O with cyber liability bundled is the foundation.
Critical Coverage
Professional Liability (E&O)
Covers claims of negligence or mistakes in professional services
What it covers
Tech E&O for software defects, missed deadlines, IP infringement (you used a copyleft library), SaaS uptime SLA disputes, performance shortfalls.
Common misconception
Developers think 'we did what was in the spec.' Plaintiffs argue scope misunderstanding, missed implied requirements, and industry-standard expectations.
What it does NOT cover
Intentional acts. Express warranties beyond standard. Patent infringement (often separate).
The gap — what happens without it
Custom inventory software fails on Black Friday, costing client $180K in lost sales. Suit for breach + negligence. Tech E&O defends and pays.
What drives your premium
Revenue, services mix (custom dev vs. SaaS), client size, claims
Endorsements to ask about
Combined cyber/E&O. IP infringement defense. Rectification costs (cost of fixing the error).
Cyber Liability
Covers data breaches, ransomware, and digital threats
What it covers
Breach response, customer data exposure (apps holding user PII), ransomware on dev infrastructure.
Common misconception
Developers think 'AWS handles security.' AWS protects infrastructure; you're responsible for application security and customer data handling.
What it does NOT cover
Unencrypted data. Unpatched vulnerabilities.
The gap — what happens without it
API misconfiguration exposes 50,000 user records — notification, monitoring, regulatory: $280K. Cyber pays.
What drives your premium
Records, MFA, prior incidents
Endorsements to ask about
Combined cyber/E&O. Funds-transfer fraud.
Important Coverage
General Liability
Covers third-party bodily injury and property damage claims
What it covers
Office, advertising injury.
Common misconception
Remote dev shops still need GL for client contracts.
What it does NOT cover
Professional services. Cyber.
The gap — what happens without it
Visitor trips at office — $7K. GL pays.
What drives your premium
Office, employees
Endorsements to ask about
Hired/non-owned auto. Worldwide.
Employment Practices Liability (EPLI)
Covers wrongful termination, discrimination, and harassment claims
What it covers
Employment claims.
Common misconception
Engineering teams have specific harassment/diversity exposure.
What it does NOT cover
Wage/hour.
The gap — what happens without it
Terminated engineer alleges discrimination — $60K. EPLI pays.
What drives your premium
Employees, state, claims
Endorsements to ask about
Wage/hour.
Directors & Officers (D&O)
Covers personal liability of company leadership
What it covers
Officer liability — investor claims, fundraising disputes.
Common misconception
VC-backed startups face investor disputes routinely.
What it does NOT cover
Fraud.
The gap — what happens without it
Series A investor sues over revenue projections — D&O defends $150K.
What drives your premium
Funding, structure, claims
Endorsements to ask about
Entity coverage.
Not sure what you need?
Text us your trade and state — we'll tell you exactly what coverages apply to your business and shop the market for the best rate.