How Do I Price My Technology Services Profitably?

Nate Jones, CPCU, ARM, CLCS, AU
Oct 24
3 min read

Pricing your technology services correctly is essential to building a profitable and sustainable business. Whether you offer IT support, managed services, software development, or cybersecurity solutions, your pricing strategy impacts your revenue, client relationships, and ability to scale.

At Wexford Insurance, we specialize in helping technology businesses protect their operations with tailored insurance solutions. In this guide, we’ll walk you through how to price your tech services effectively—and how insurance plays a key role in supporting your pricing strategy.

Why Pricing Matters in the Tech Industry

Technology services are often complex, customized, and high-value. Your pricing must reflect:

Time and expertise
Value delivered to the client
Ongoing support or maintenance
Risk and liability exposure
Market demand and competition

Underpricing can lead to burnout and financial instability. Overpricing can drive away potential clients. The goal is to find a balance that reflects your value while remaining competitive.

Popular Pricing Models for Technology Services

Here are the most common pricing structures used by IT service providers:

1. Hourly Rate

Ideal for ad-hoc support or consulting. Rates vary based on experience, location, and specialization.

2. Project-Based Pricing

Used for software development, website builds, or cybersecurity audits. You quote a fixed price based on scope, timeline, and deliverables.

Read More: How to define project scope

3. Monthly Retainers

Common for managed services providers (MSPs). Clients pay a monthly fee for ongoing support, monitoring, and updates.

4. Value-Based Pricing

You price based on the value your service provides to the client. This is ideal for high-impact solutions like cybersecurity or automation.

Key Factors to Consider When Setting Prices

1. Your Costs

Include labor, software licenses, equipment, marketing, and insurance.

2. Client Type

Enterprise clients may have bigger budgets and higher expectations. SMBs may need more flexible pricing.

3. Market Rates

Use platforms like Upwork to research what others charge in your niche.

Read More: Upwork hourly rates by skill

4. Your Experience and Reputation

Established businesses can charge more. If you're just starting, consider introductory pricing to build your portfolio.

Mistakes to Avoid

Ignoring hidden costs like software subscriptions or subcontractor fees
Failing to account for insurance—especially professional liability, which protects you from costly lawsuits
Not reviewing pricing regularly as your business grows or the market shifts

How Insurance Supports Your Pricing Strategy

Insurance isn’t just protection—it’s a strategic asset that supports your pricing model. When clients hire a technology services provider, they often ask whether you're insured before signing a contract. Having the right coverage allows you to confidently charge premium rates, bid on larger contracts, and protect your income from unexpected claims.

Here are the essential types of insurance for technology businesses:

General Liability Insurance – Covers third-party bodily injury and property damage claims
Professional Liability Insurance (Errors & Omissions) – Protects against claims of negligence or mistakes in your services
Commercial Auto Insurance – Covers vehicles used for business purposes
Commercial Property Insurance – Protects your office space, equipment, and inventory
Workers Compensation Insurance – Required if you have employees; covers workplace injuries
Equipment Insurance – Covers laptops, servers, and other tech gear against theft or damage

At Wexford Insurance, we help technology businesses find affordable, specialized coverage tailored to their services—so you can focus on delivering value and scaling profitably.

Final Thoughts

Pricing your technology services is both an art and a science. It requires understanding your costs, your market, and your value. And just as important—protecting your business with the right insurance.

If you’re starting or growing a technology services business, reach out to Wexford Insurance. We’ll help you find the right coverage so you can focus on delivering value and scaling profitably.

Contact us today.