Software business insurance costs vary widely across coverage types, and understanding these differences helps you budget smartly. MoneyGeek's analysis shows monthly premiums range from $26 for workers' compensation to $95 for professional liability coverage.
How Much Does Software Business Insurance Cost?
Software business insurance rates begin at $26 per month, but your specific business details will determine your actual cost.
Discover cheap software business insurance below.
Select your industry
Updated: August 16, 2025
Advertising & Editorial Disclosure
Key Takeaways
Software business insurance costs range from $26 to $95 monthly, depending on your coverage type.
Your software insurance premiums depend on location, claims history, property types serviced and employee count.
Shop multiple insurers, bundle policies, increase deductibles and pay annually to find affordable software business insurance costs.
Average Software Business Insurance Cost Overall
| BOP | $30 |
| General Liability | $27 |
| Professional Liability (E&O) | $95 |
| Workers Comp | $26 |
How did we determine these rates?
These rates are for small businesses with two employees across 79 major industries or business types and focus on four coverage types: general liability, professional liability/E&O, workers' comp and business owner's policy. Survey results reflect limited sample data and may not represent all available rates in your area.
Software Business Insurance Cost for General Liability Coverage by State
Your software business insurance cost for general liability coverage depends on where you operate. North Carolina offers the most savings at $23 monthly (versus the $27 national average), while Hawaii costs $33 monthly.
| Alabama | $26 |
| Alaska | $28 |
| Arizona | $25 |
| Arkansas | $25 |
| California | $29 |
| Colorado | $26 |
| Connecticut | $29 |
| Delaware | $28 |
| Florida | $29 |
| Georgia | $27 |
| Hawaii | $33 |
| Idaho | $25 |
| Illinois | $29 |
| Indiana | $26 |
| Iowa | $25 |
| Kansas | $26 |
| Kentucky | $25 |
| Louisiana | $32 |
| Maine | $23 |
| Maryland | $25 |
| Massachusetts | $28 |
| Michigan | $25 |
| Minnesota | $25 |
| Mississippi | $27 |
| Missouri | $26 |
| Montana | $26 |
| Nebraska | $25 |
| Nevada | $30 |
| New Hampshire | $26 |
| New Jersey | $30 |
| New Mexico | $27 |
| New York | $31 |
| North Carolina | $23 |
| North Dakota | $23 |
| Ohio | $25 |
| Oklahoma | $26 |
| Oregon | $25 |
| Pennsylvania | $30 |
| Rhode Island | $29 |
| South Carolina | $27 |
| South Dakota | $25 |
| Tennessee | $26 |
| Texas | $27 |
| Utah | $25 |
| Vermont | $25 |
| Virginia | $24 |
| Washington | $30 |
| West Virginia | $28 |
| Wisconsin | $26 |
| Wyoming | $24 |
How did we determine these rates?
These rates are for small businesses with two employees across 79 major industries or business types and focus solely on general liability policies. Survey results reflect limited sample data and may not represent all available rates in your area.
Software Business Insurance Cost for Workers’ Compensation Coverage by State
Your software business's cost for workers' compensation varies by state. Maine offers the lowest rates at $23 monthly and New York the highest at $31 monthly. Our analysis reveals how state regulations and claim histories create these differences.
| Alabama | $26 |
| Alaska | $24 |
| Arizona | $25 |
| Arkansas | $25 |
| California | $29 |
| Colorado | $26 |
| Connecticut | $29 |
| Delaware | $28 |
| Florida | $29 |
| Georgia | $27 |
| Hawaii | $28 |
| Idaho | $25 |
| Illinois | $29 |
| Indiana | $26 |
| Iowa | $25 |
| Kansas | $26 |
| Kentucky | $25 |
| Louisiana | $30 |
| Maine | $23 |
| Maryland | $25 |
| Massachusetts | $27 |
| Michigan | $25 |
| Minnesota | $25 |
| Mississippi | $27 |
| Missouri | $26 |
| Montana | $26 |
| Nebraska | $25 |
| Nevada | $30 |
| New Hampshire | $26 |
| New Jersey | $30 |
| New Mexico | $27 |
| New York | $31 |
| North Carolina | $23 |
| Oklahoma | $25 |
| Oregon | $25 |
| Pennsylvania | $30 |
| Rhode Island | $29 |
| South Carolina | $27 |
| South Dakota | $25 |
| Tennessee | $26 |
| Texas | $27 |
| Utah | $25 |
| Vermont | $25 |
| Virginia | $24 |
| West Virginia | $28 |
| Wisconsin | $26 |
How did we determine these rates?
These rates are for small businesses with two employees across 79 major industries or business types and focus solely on workers’ comp policies. Workers' compensation requirements vary by state and are mandated by state regulations. Survey results reflect limited sample data and may not represent all available rates in your area.
Software Business Insurance Cost for Professional Liability Coverage by State
Like other types of coverage, cost for professional liability varies by state. The national average for software businesses is $95 monthly. Maine offers the lowest rates at $82 monthly, while E&O insurance in Washington costs $110 monthly.
| Alabama | $94 |
| Alaska | $84 |
| Arizona | $90 |
| Arkansas | $92 |
| California | $105 |
| Colorado | $96 |
| Connecticut | $102 |
| Delaware | $103 |
| Florida | $104 |
| Georgia | $99 |
| Hawaii | $95 |
| Idaho | $90 |
| Illinois | $105 |
| Indiana | $94 |
| Iowa | $91 |
| Kansas | $92 |
| Kentucky | $87 |
| Louisiana | $105 |
| Maine | $82 |
| Maryland | $91 |
| Massachusetts | $100 |
| Michigan | $88 |
| Minnesota | $90 |
| Mississippi | $94 |
| Missouri | $92 |
| Montana | $95 |
| Nebraska | $89 |
| Nevada | $106 |
| New Hampshire | $94 |
| New Jersey | $109 |
| New Mexico | $96 |
| New York | $108 |
| North Carolina | $82 |
| North Dakota | $83 |
| Ohio | $88 |
| Oklahoma | $88 |
| Oregon | $88 |
| Pennsylvania | $108 |
| Rhode Island | $105 |
| South Carolina | $99 |
| South Dakota | $88 |
| Tennessee | $93 |
| Texas | $97 |
| Utah | $91 |
| Vermont | $91 |
| Virginia | $88 |
| Washington | $110 |
| West Virginia | $99 |
| Wisconsin | $93 |
| Wyoming | $87 |
How did we determine these rates?
These rates are for small businesses with two employees across 79 major industries or business types and focus solely on professional liability policies. Survey results reflect limited sample data and may not represent all available rates in your area.
Software Business Insurance Cost for BOP Coverage by State
Business owner's policy rates show wide variation in software business insurance cost by state. For example, coverage in New York costs $36 monthly, while the same policy amounts to $26 in North Dakota.
| Alabama | $30 |
| Alaska | $28 |
| Arizona | $29 |
| Arkansas | $29 |
| California | $34 |
| Colorado | $30 |
| Connecticut | $33 |
| Delaware | $32 |
| Florida | $33 |
| Georgia | $31 |
| Hawaii | $33 |
| Idaho | $29 |
| Illinois | $34 |
| Indiana | $30 |
| Iowa | $29 |
| Kansas | $29 |
| Kentucky | $28 |
| Louisiana | $34 |
| Maine | $26 |
| Maryland | $29 |
| Massachusetts | $31 |
| Michigan | $29 |
| Minnesota | $29 |
| Mississippi | $31 |
| Missouri | $30 |
| Montana | $30 |
| Nebraska | $29 |
| Nevada | $35 |
| New Hampshire | $29 |
| New Jersey | $34 |
| New Mexico | $30 |
| New York | $36 |
| North Carolina | $26 |
| North Dakota | $26 |
| Ohio | $28 |
| Oklahoma | $29 |
| Oregon | $28 |
| Pennsylvania | $35 |
| Rhode Island | $33 |
| South Carolina | $31 |
| South Dakota | $28 |
| Tennessee | $30 |
| Texas | $31 |
| Utah | $28 |
| Vermont | $29 |
| Virginia | $27 |
| Washington | $34 |
| West Virginia | $31 |
| Wisconsin | $30 |
| Wyoming | $28 |
How did we determine these rates?
These rates are for small businesses with two employees across 79 major industries or business types and focus solely on BOP coverage. Survey results reflect limited sample data and may not represent all available rates in your area.
Factors Affecting Software Business Insurance Cost
Software business insurance costs vary based on several factors that insurance companies review to set premiums. Understanding these cost drivers helps with budget planning. Here's a detailed look at what affects your rates.
Geographic location
Your business location affects liability and workers' compensation rates due to local regulations and claim frequencies. Operating in areas with higher cyber crime rates or natural disasters increases your risk profile; state differences create substantial premium variations.
Safety record and claims History
Previous claims impact future premiums, sometimes for three to five years. A single data breach or professional liability lawsuit can increase your general liability rates at renewal.
Employee count and payroll
Insurers calculate workers' comp premiums based on your total payroll and job classifications. Adding software developers, IT staff and support personnel increases your payroll costs, directly impacting your workers' compensation premiums since insurers calculate your rates per dollar of wages paid.
Services offered
Software development, cloud hosting, data management and cybersecurity services carry different risk levels. A company offering basic website maintenance faces lower premiums than one handling sensitive financial data or healthcare information.
Business size and revenue
Higher annual revenue typically means higher premiums because insurers view larger operations as having more exposure to claims. For example, a freelance developer earning $80,000 annually pays less than an enterprise software company with $2 million in revenue.
Coverage limits
Higher coverage limits provide better protection but cost more monthly. Choosing between different coverage amounts directly affects your premium, with higher limits increasing costs proportionally.
Credit score and financial stability
In most states, insurers can consider your business credit score when setting rates. A strong credit score can reduce premiums, while poor credit often increases costs substantially.
How to Get Cheap Software Business Insurance
Smart shopping and good business practices can lower your software business insurance costs. Here are proven strategies to reduce your premiums now and build a stronger risk profile over time.
- 1
Choose the right coverage types for your software business
Understanding what types of business insurance your software company needs prevents overpaying for unnecessary coverage. Professional liability protects against coding errors, while cyber liability covers data breaches. General liability remains essential for basic business protection
- 2
Shop multiple insurance companies
Insurance rates can vary between carriers for identical coverage. Compare quotes from at least three insurers to find the best rates. Consider working with independent agents who can access multiple carriers
- 3
Bundle your coverage types
Insurance carriers offer substantial discounts when you bundle multiple policies. Combining professional liability, cyber coverage and general liability with one insurer typically costs less than separate policies from different companies
- 4
Increase your deductibles
Choosing higher deductibles reduces your monthly premiums. This strategy works well for software companies with strong cash reserves who can handle larger out-of-pocket expenses for smaller claims
- 5
Pay annually instead of monthly
Monthly payment processing fees can significantly increase your total insurance cost. Paying your premium annually often earns discounts and eliminates these extra charges
- 6
Review and adjust your coverage annually
Your software business insurance needs evolve with your company growth. Review policies yearly to adjust coverage limits, add protection for new services and remove unnecessary coverage
Insurance for Software Business Cost: Bottom Line
Software business insurance costs range from $26 to $95 monthly, with your location, claims history and business size driving your actual premium. Getting quotes from multiple insurers, bundling your policies, choosing higher deductibles and paying annually instead of monthly helps you find more affordable rates.
Software Business Insurance Cost: FAQ
Business owners often ask about software company insurance costs. Here's what you need to know about common coverage expenses and requirements.
What is the cheapest type of software business insurance?
Workers' compensation insurance costs $26 monthly, making it the most affordable option for software businesses. However, most companies need general liability coverage ($27 monthly) to protect against customer injuries and property damage.
How much can I save by bundling my software business insurance policies?
Bundling business insurance policies offers the best value. General liability insurance costs $324 per year, making it one of the most cost-effective individual coverage options for software businesses.
What factors make my software business insurance more expensive?
General liability insurance is the most cost-effective option at $27 per month. Location, claims history, staff size, service types and equipment value influence overall insurance costs for software businesses and can make it expensive.
Should I choose a $500 or $2,500 deductible for my software business insurance?
Higher deductibles lower your monthly premiums but require more out-of-pocket costs when filing claims. Consider your business cash flow and claim frequency when choosing.
How much does workers' compensation cost for software businesses by state?
Workers' compensation insurance costs vary from $23 monthly in Maine to $31 monthly in New York, with rates influenced by your business location and state regulations.
Is business owner's policy (BOP) worth the extra cost for software companies?
A BOP costs $30 monthly for software companies and bundles general liability, commercial property and business interruption coverage. This package deal saves money compared to purchasing separate policies.
How often should I shop around for software business insurance quotes?
Shopping for software business insurance quotes should be done annually during renewal. Compare at least three insurers to find better rates, particularly if your business is growing or changing.
How We Determined Software Business Insurance Costs
We collected software business insurance quotes from companies across different states. To make sure we compared apples to apples, every quote used the same business setup:
- Two employees (three people total, including the owner)
- $150,000 annual payroll
- $300,000 annual revenue
- Already insured status
- $1 million per occurrence and $2 million total per year for all coverage except BOP, which includes the same limits plus $5,000 business property coverage
This profile represents small software businesses requiring comprehensive insurance coverage in most states. We chose companies offering broad national coverage and online quote capabilities, focusing on insurers that actively serve the software industry.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.