Liability insurance for a self-employed software developer
Code that only appears on a screen causes financial loss. Code that controls a machine, a door or a medical device can cause injury and property damage: and that is a different policy domain.
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The calculator and the quote form below are in Dutch. Prefer to do this in English? Email info@finassverzekert.nl or call 072 - 509 24 56 and we will take it from there.
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In brief
For most developers the position is: a bug leads to downtime, data loss or a wrong calculation, and therefore to a claim for money. That is pure financial loss and the AVB is not there for it. Such a claim belongs on professional indemnity insurance. How the AVB works in general is set out on hub page on public and employers' liability.
There is one situation where the position is different. If you write software that controls physical equipment — a production line, a control system in a vehicle, an access installation, measuring or dosing equipment — a fault certainly can lead to damaged property or injured people. The AVB and the product liability under Article 6:185 of the Dutch Civil Code then come into play. Say so when you apply, because a policy issued on the capacity of 'application development' does not automatically cover embedded work.
Note also what an AVB never pays: the cost of putting right your own delivery. Redeveloping, rolling back, redeploying a release — that is performance of your own obligation, not damage at a third party. Compensation you have accepted by contract through a service level or penalty clause also falls outside the cover.
This page deals with one situation. The full overview is on Compare public and employers' liability insurance (AVB).
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Get coveredWhy arrange it through Finass Verzekert?
We look at the terms as well as the premium, and stay your point of contact when there is a claim.
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We are not tied to one insurer and compare on the basis of an objective analysis of several companies.
One fixed adviser
You call or email someone who knows your file. No menu options, no changing call centres.
Switching without hassle
We cancel your old policy and align the start date, so you are never a day without cover.
Help with claims
We report the claim and monitor how it is handled. In urgent cases you can reach us on the emergency line.
What to look out for
Four points that determine which cover you really need as a developer.
Does your code control something physical?
This is the dividing line. Control of machines, robots, locks, refrigeration or medical devices brings injury and property damage risk with it and belongs expressly in the description on your policy schedule. Have the capacity amended as soon as you move from web applications to embedded or industrial software.
The client's hardware and test rigs
Development kits, test rigs, prototypes and servers you have at home or in your workspace are property in your care. If they are damaged, the standard AVB keeps its hand on its wallet. Ask for a care, custody and control clause or record in black and white that ownership and risk stay with the client.
Putting right your own work is not damage
The hours you spend fixing your own bug are never insured, on any liability policy. The costs the client incurs to have your delivery adjusted or replaced also fall under the exclusion for the product supplied itself. What is insured is only the damage the defect causes to others.
What you accept in the contract
Contracts for hire often contain an unlimited indemnity or a penalty per hour of downtime. Liability going beyond the law is excluded on the AVB. Limit your liability in your contract terms and check that the sum insured required and the form of cover you want fit together before you sign.
What does your premium depend on?
- Annual turnover: the basis for a self-employed professional without staff
- Type of software: embedded and industrial control weigh more heavily than web applications
- The sector your clients are in: healthcare, industry and financial services carry higher consequential losses
- Sum insured and excess: per claim and per insurance year
- Area of cover: supply to the United States or Canada is often excluded
- Combination with professional indemnity: one package is generally cheaper than separate policies
Insurers weigh these details differently. That is where your saving is.
What is covered
| Situation | AVB | BAV |
|---|---|---|
| A control error lets a robot arm overshoot and the production jig breaks | Yes | No |
| A dosing installation runs too long because of your code and a whole batch of raw material is unusable | Yes | No |
| A calculation error in your invoicing module makes the client undercharge for a year | No | Yes |
| A migration script renders historical order data unreadable beyond repair | No | Yes |
| Your client's test rig, standing in your attic, burns out | No | No |
| A vulnerability in the application you built exposes customer data | No | Provided that |
As soon as your code controls something physical, part of your risk moves to the left; make sure the capacity on the policy schedule follows that difference.
Frequently asked questions
This is what people ask us most.
A bug in my code brought down the client's webshop. Who bears that?
Your AVB certainly does not. Loss of turnover through downtime is financial detriment without damaged property, and that policy is not made for it. Professional indemnity insurance is the appropriate cover here. Also check whether your contract contains a liability cap, because that cap often determines more than the level of the policy limit.
I write control software for machines. Does that change my insurance?
Yes. As soon as software controls physical actions, a defect can lead to property damage or injury and the AVB becomes relevant, together with the product liability under Article 6:185 of the Dutch Civil Code. Insurers assess this risk separately and want to know which equipment and which sector are involved.
Is a data breach in the application I built insured?
Not through the AVB. Investigation, clean-up, notification and the claims of the people concerned belong with cyber insurance, for example cyber insurance for IT companies. A fine from the Autoriteit Persoonsgegevens (the Dutch data protection authority) stays outside it: that is punitive in nature and therefore not insurable.
What does a claim that only comes years later mean?
Software stays in use for a long time, so never notify late and do not end a policy without thinking about the period afterwards. Check whether your insurance works on the basis of the date of the claim or of the error, and ask about run-off cover for claims from old assignments if you wind up the business.
Every situation is different. For these situations we have a separate page.
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