Dev Shop Insurance in the US: What You Need

Last updated: August 2024. Pricing verified August 2024 — changes often; verify before committing.

🎯 A US dev shop of 2 to 20 people typically needs four coverages: professional liability (E&O), general liability, cyber liability, and workers' compensation. Expect $150 to $600 per month total for a small agency, driven mostly by revenue, headcount, and the contract terms your enterprise clients demand. Professional liability for dev shops is the non-negotiable one, because your risk is bad code and missed deadlines, not slip-and-fall.

TL;DR

• 4 core coverages: E&O (professional liability), general liability, cyber, and workers' comp.
• Typical spend for a 2–20 person agency: $150–$600/month, revenue-dependent.
• Workers' comp is state-administered in 49 states (Texas is the exception) — requirements vary; check your state agency.
• The trigger that changes everything: your first enterprise MSA, which often contracts you into specific coverage amounts.

Don't buy yet: Verify your state's workers' comp requirements and get at least two or three quotes before selecting a broker or binding any policy. This guide helps you scope what to ask for, not what to sign today.

Definition Box

Dev shop insurance is the set of business insurance policies a software agency, dev studio, or consultancy carries to cover claims from its work: professional errors, third-party injury or property damage, data breaches, and employee injury. For a US software agency, the center of gravity is professional liability (errors and omissions), because most claims trace back to the code, not the office.

This is information, not advice. Erni maps what your business change triggers; a licensed broker or agent binds the actual policy.

What insurance does a dev shop need in the US?

Start with four coverages, in this order of priority for a software agency:

1. Professional liability (E&O / tech E&O) — covers claims that your work caused financial harm: a bug that took down a client's checkout, a missed deadline, a spec you didn't meet. This is the coverage clients name in contracts.
2. General liability (GL) — covers third-party bodily injury and property damage. Landlords and co-working spaces often require it before you sign a lease.
3. Cyber liability — covers breach response, notification costs, and liability when customer data you store or process is exposed.
4. Workers' compensation — covers employee injury and lost wages. This is state-administered; rules, exemptions, and thresholds vary by state.

Many providers bundle E&O and cyber into a single "tech E&O + cyber" policy, which is usually how software agencies buy.

For authoritative baselines, see the U.S. Small Business Administration guide to business insurance (accessed August 2024), the NCCI overview of state workers' compensation systems (accessed August 2024), and — for the Texas exception specifically — the Texas Department of Insurance workers' compensation page (accessed August 2024).

Ranked by fit for a 2–20 person US dev shop, not by reward. Offers are activation benefits shown inline, not ranking factors. Methodology: coverages are ordered by claim frequency and contract necessity for software agencies, not by commission or provider incentive.

The workflow: from signed lease to fully covered in 5 steps

Here is the deployment, one coverage per step, with the tool that binds it, its offer status, and the monthly cost. Carry one input through all five: a 6-person React/Node dev shop in Austin, TX, doing $900K in annual revenue, one enterprise SaaS client with a signed MSA.

1. General liability — bind at lease signing. When you sign your Austin office or co-working agreement, the landlord will likely require GL naming them as additional insured. Get this through a small-business carrier such as Hiscox or Next Insurance. For this profile, budget roughly $40–$70/month for a standard $1M/$2M GL policy.

2. Professional liability (tech E&O) — bind before the MSA takes effect. Your enterprise SaaS client's MSA almost certainly names a required E&O limit (often $1M–$2M per claim). Bind through Hiscox, Vouch, or Embroker, which specialize in tech E&O. For a $900K-revenue shop, expect $70–$150/month depending on the limit your MSA demands.

3. Cyber liability — bind alongside or bundled with E&O. Because you store and process client data, add cyber coverage — often bundled as "tech E&O + cyber" from the same carrier. Through Embroker or Coalition, budget $30–$90/month for this profile.

4. Workers' compensation — check the Texas exception first. Texas is the one state where workers' comp is not mandatory for private employers. A 6-person Austin shop can legally go non-subscriber, but doing so removes your liability protection against employee injury suits — many agencies still carry it voluntarily. If you buy, use Pie Insurance or AP Intego; budget $15–$40/month for a low-risk office workforce. Confirm your obligations against the Texas Department of Insurance link above before deciding.

5. Verify total and review annually. Sum the above for this profile: roughly $155–$350/month, comfortably inside the $150–$600 range. Reassess at each new enterprise MSA, each headcount jump, and each renewal — contract terms, not revenue alone, drive the biggest changes.

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This is information, not advice. Verify state requirements and obtain multiple quotes from a licensed broker before binding any policy.