Insurance Cost for a Technology Company: What Affects Your Premium?
- 4 hours ago
- 2 min read
Technology companies face unique risks, including cyberattacks, equipment failure, and professional errors. Understanding typical insurance costs helps business owners protect their operations while budgeting effectively.
Typical Insurance Costs for Technology Companies
Average annual premiums vary depending on coverage type, company size, and risk exposure. Here are typical cost ranges:
General liability: $400–$1,000 per year for small technology firms.
Professional liability (Errors & Omissions): $1,200–$3,000 per year for $1M/$1M coverage.
Cyber liability: $1,000–$2,500 per year depending on data sensitivity.
Business property/equipment insurance: $500–$1,500 per year, depending on equipment value.
Workers’ compensation: $0.75–$2.50 per $100 of payroll, depending on state and employee roles.
For many small technology companies, a comprehensive insurance package typically costs $3,000–$7,000 annually, while larger firms with more data and equipment may pay significantly more.
Business Scope and Its Effect on Technology Company Insurance
The services your technology company provides influence premiums. Firms offering software development, IT consulting, or cloud services face different risks. High-risk services handling sensitive client data or financial systems generally lead to higher insurance costs due to potential liability for errors or cyber incidents.
Experience, Claims History, and Location
Insurers consider your company’s experience and claims record. Established technology businesses with minimal claims often receive lower rates, while startups may pay more. Geographic location also matters: regions with higher cybercrime rates, litigation risk, or natural disaster exposure can increase premiums. Resources like the National Cybersecurity Alliance help companies mitigate these risks.
Equipment and Data Protection Considerations
Technology companies rely on high-value equipment such as servers, laptops, and network systems. Insurance should cover theft, accidental damage, and equipment failure. Cyber liability protects against data breaches, ransomware attacks, and software errors, which can dramatically increase a company’s financial exposure.
Securing Tailored Coverage
Bundling general liability, professional liability, and property coverage can lower total costs. Maintaining strong cybersecurity practices and regularly reviewing policies ensures coverage remains appropriate as the business grows.
For personalized insurance solutions, Wexford Insurance specializes in protecting technology companies. Our team can provide customized quotes to fit your company’s unique needs.
